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Chip Market Buzzes into Life as MAXIM Merges with ADI

Despite battling economic headwinds, the semiconductor industry continues to consolidate with big players joining forces to satisfy the growing global appetite for electronic chips.

American chipmaker Analog Devices (ADI) has now announced the acquisition of rival chipmaker Maxim in an all-stock transaction worth $20.91 billion. The firms represent two of the biggest names in chip design, and produce dozens of components for a broad range of applications.

ADI focuses on high-performance integrated circuits used for demanding tasks like data acquisition, digital signal processing, and power management, particularly in military and space applications. Maxim meanwhile, is mostly known for sensors and power management, and has specific expertise in wearables.

The companies have significant overlap in their product portfolios, and both compete directly against market leader Texas Instruments.  If the deal passes regulatory muster, then the combined ADI/Maxim enterprise will become the second-largest global analog chip supplier.

As one of the more acquisitive chipmakers, ADI has set a fast pace for silicon industry dealmaking over the last few years – picking up Hittite, a major player in the RF world in 2014, and analog specialist Linear Technologies in 2016. These purchases were made against a backdrop of chip market consolidation, including the largest semiconductor deal ever in 2015 with Avago Technologies’ buying Broadcom for $37 billion.

Despite concerns that such unprecedented levels of M&A activity might be short-lived, the rapid evolution of computing and connectivity has continued to spur semiconductor dealmaking. Industry consolidation accelerated in 2019, and Acuity Advisors’ Managing Partner Matthew Byatt says the ADI Maxim mega deal could now signal a new burst of activity, that will eventually “ripple down into the mid-market”:

“ADI’s acquisition of Maxim demonstrates that there are still large strategic deals to be done. The proposed transaction is a stock-swap and preserves ADI’s cash position for more M&A as they are now positioned as the next major consolidator. At Acuity Advisors, we see this as a positive sign.”

Matthew Byatt | Managing Partner

Matthew is a Co-Founder and Managing Partner at Acuity and leads the Acuity Advisors’ Deeptech practice.

Matthew has held senior leadership and corporate finance positions with some of the UK’s most successful and influential technology and consultancy companies. Roles with ARM, McKinsey and Cadence have given Matthew an exceptional insight into the world’s most successful businesses and a number of the UK’s eminent start-ups, underpinning his success at Acuity.

Matthew has considerable experience across a broad range of technology sectors throughout the UK, US and Asia, ranging from nanotechnology, semiconductor and cleantech to digital media and internet businesses. It’s experience that has given him a robust, well-developed and international network. Having also run and successfully exited his own business, Matthew has a deep understanding of the financial and emotional aspects of this demanding process, bringing a unique and authoritative perspective to each business sale.

One of Matthew’s strengths is understanding complex technical value propositions, one of the benefits of training as an electronic engineer. He gets to the heart of what drives a company’s value and communicates this persuasively to potential buyers and investors. Matthew understands a buyer’s motivation intuitively and delivers a compelling rationale for why a business sale should be of strategic interest. His insight consistently yields higher deal values and results in great successes for his clients.

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