DSP Group Inc. (DSPG) stock prices surged by 17.50% some time after market trading commenced on August 30th, 2021. This brought the price per share up to USD$21.50 early on in the trading day.
DSPG Stock Acquired by Synaptics
August 30th, 2021 saw DSPG stock announce the signing of a definitive agreement with Synaptics Inc. The agreement was unanimously approved by the boards of directors of both companies. As per the agreement, Synaptics will acquire DSP Group, a leading global provider of voice and wireless chipset solutions for converged communications. The transactions will be conducted entirely in cash and will be valued at USD$22.00 per share. The acquisition is expected to result in the generation of annual run-rate synergies of USD$30 million, which the combined entity will realize within 12 months of closing.
Transaction Details
This sum is immediately accretive to Synaptics’ non-GAAP earnings. The funding of the transaction is expected to be comprised of a combination of cash on hand and a fully committed, incremental debt financing arrangement. This arrangement has a projected closing date for the end of the calendar year 2021, pending DSPG stocks’ shareholder’s approval and customary closing conditions.
About DSPG Stock
DSPG stock has leadership positions across a myriad of markets in the Internet of Audio Things (IoAT). The company also boasts significant growth opportunities in low power SmartVoice, unified communications & collaboration, and wireless IoT devices. A majority of the solutions offered are relevant to the existing consumer base of the partnering company, facilitating the strategy of cross-selling portfolio devices.
Scope of Collaboration
Synaptics recently announced its Low Power Edge AI initiative. This initiative results in a significant long-term opportunity with ABI research, with forecasts of 2.5 billion TinyML units being sold by 2030. The addition of DSPG stock’s best-in-class SmartVoice products to Synaptics’ Katana smart vision platform will create a more complete portfolio. This will result in the serving of existing customer needs as well as the addressing of the significant future market. Furthermore, the collaboration further consolidates Synaptics’ industry leading wireless connectivity portfolio with the addition of DECT ULE.
Future Outlook for DSPG Stock
The company reported a promising quarter, consolidated by its definitive agreement to merge with Synaptics. DSPG stock is poised to capitalize on the expanded scope of opportunities ahead of it as it leverages the additional resources at its disposal. Investors are hopeful for significant and sustained increases in shareholder value over the long term.
