Synaptics ( SYNA ) was up 6.5% at the close, as investors cheered the company’s acquisition of privately held Validity Sensors, a California-based developer of biometric fingerprint authentication systems.
According to the deal, Synapics will pay about $92.5 million in stock and cash for the firm, plus potential performance payments over a multi-year period that could bring the cost up to $255 million. Needham & Co. analyst Rajvindra Gill was upbeat about the acquisition in a note out today, reiterating a Buy rating and $54 price target.
“We believe this acquisition is crucial for several reasons: 1) it places SYNA at the forefront of a leading-edge technology in the handset market; i.e., fingerprint sensors; 2) it effectively doubles the addressable market as SYNA can sell an additional sensor per unit; 3) it further solidifies our thesis that SYNA has the leading and the broadest technology platform in the capacitive touch market; and 4) it expands SYNA’s entry into mobile payments, cloud-based services and enterprise mobile device security.”
Gill noted that Validity Systems’ high-frequency RF imaging technology is similar to that used in Apple’s ( AAPL ) new iPhone 5s, and that there is increasing interest from handset OEMs for this technology.
Pacific Crest’s John Vinh was optimistic as well. He made a similar point as he reiterated his Outperform rating and $58 price target in a note out today: […]
Source blogs.barrons.com