This is CSR

We're branching out into new areas, see video.

Certainly beats our video; and Broadcom's is even more boring, though they know how to dance.

All of which is a preamble to noting that we're merging with SIRF. Or perhaps we're buying them. Who ya gonna trust - PC mag or the FT? Not a tricky one, that. Sez the FT, we're snapping up a US-based rival at a knockdown price... values the US group at about £91m ($136m), a 91 per cent premium to its share price. I'm not quite sure how come a 91% premium is a knock-down price, and I'm not giving any secrets away there as I really don't know. You can read our press release or SIRF's, though I didn't. Not mentionned much by anyone is that SIRF does bluetooth.

Shares is up, but as Forbes points out that's on SiRF purchase and Nokia win so it's hard to disentangle. That also includes the delightful CSR management expects $35 million of costs synergies (from the SiRF deal) - no-one I've mentionned this to has ever heard of "cost synergies" before but everyone knows *exactly* what it means.

Other than that, doesn't look like anyone knows anything interesting.

But perhaps you like King Billy?

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I'd hazard (not being high on finance) that it's considered a knockdown price because SiRF's share price is considered artificially low because of the weakness of the stockmarket. Also, CSR intend to spend $136m (all in company shares) for a company that has "$116m in cash on [the] balance sheet as of December 27" and "the combined group would have $378m of cash, on a pro forma basis, and no bank debt".

Add in the cost synergies (but you know about them, so don't bother reading the link) and presumably SiRF being a funadamentally sound company (CSR of course is!), then even I can see that's a mighty good deal on the face of it (I think?).

Of course, if you end up being a cost synergy, then it won't look so rosy.

Good luck.

Technology-company mergers can be either good or bad, I've been through one of each. [MIPS->SGI; SGI-buying-Cray].

1) Fortunately, I'd guess cost synergies come more for administrative overhead, and in some cases, maybe reduction in cost of sales. It's useful if a salesperson has a bigger portfolio of products to offer in a sales call.

2) On the other hand, if people finding themselves flying back and forth across the Atlantic a lot more, or if designers find themselves in frequent teleconferences at odd hours trying to make a next-generation product cover too many different goals, it will Not Be Fun. Teleconferences can work OK,but work better if the participants have gotten some in-person experience first.

3) Do the CSR powers-that-be have experience (both plus and minus) with acquisitions? Cisco is a prime example of a company that developed a core competence at this. SGI did several good ones, that were perhaps way too easy, and then one catastrophic one.

By John Mashey (not verified) on 11 Feb 2009 #permalink

I've heard of cost synergies. There was a lot of talk about that when my employer was taken over recently... There have been no sign of any actual layoffs yet, but everyone assumes that's what was meant (despite management claims to the contrary). Result? The company has been haemoraging talent: so far, around 10% of the local workforce (all very, very good people) have taken up headhunter offers or left to form their own companies. Honestly, you'd think that the people selling these deals to the markets would wake up to how such vague promises of shareholder jam tomorrow are interpreted by their employees...

Hey, William, does GPS work 'inside out' -- can satellites in Earth orbit rely on GPS for location information?

[I don't see why a satellite can't receive GPS like any other object -W]

I'm wondering what it will take to put a bunch of robot garbage collectors to work out there -- first tag'em, then throw'em away ....

Grab the junk with a long wire or cable, use an ion motor powered by the extended conductor to spin the combined mass up, release the connection at precisely the right time to throw the chunk of junk down along a safe track into eventual reentry and the garbage collector into a higher path ....

By Hank Roberts (not verified) on 13 Feb 2009 #permalink