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Skyworks: Too Cheap After Accretive Deal For PMC

Skyworks Solutions is trading down 8% following the deal to purchase PMC for $2 billion in cash.

The deal is immediately accretive even prior to $75 million in synergies.

Due to the recent stock drop and the accretive earnings, Skyworks Solutions now trades at very attractive levels.

Due to recent market weakness, Skyworks Solutions (NASDAQ:SWKS) was able to purchase PMC-Sierra (NASDAQ:PMCS) for a fraction over its 52-week high. Considering Skyworks Solutions only paid cash for PMC, the deal is very accretive from the start. The market though doesn't appear to like the deal with the stock trading down over 8% in midday trading.

The deal involves Skyworks paying approximately $2 billion in cash to purchase PMC-Sierra at $10.50 per share. The deal is a 37% premium to the prior close of PMC's stock, but it is only slightly above the yearly high of $9.86 back in March.