Easy come, easy go. That’s the attitude GennumCEO Franz Fink took in an interview yesterday, after his company announcedit would not match Integrated Device Technology’s $6.25 cash offerfor Ottawa-based Tundra Semiconductor. “Sometimes mergers and acquisitions aren’t completed, this is just all part of doing business,” said Fink via phone at his Burlington, Ont. headquarters. “This opportunity came up, and it looked extremely attractive from a valuation standpoint and also from a risk standpoint, because it’s a Canadian company and we already have people in Ottawa.”
But, Fink said, when San Jose, Calif-based IDTraised the stakes earlier this week, the price grew too rich for Gennum’s blood. “We offered full and fair value for Tundra,” Fink noted pointedly (despite Tundra shareholders’ desire for a sweetened bid from Gennum, and at least one analyst who argues IDT’s bid still undervalues Tundra). “What’s important in those things is that you stay rationale and not emotional, and I think we have done that and have decided not to pursue the opportunity.”
However, even as Fink defended Gennum’s strategy as being “very solid” with healthy financials, he has also said that Gennum needs to accelerate its growthin order to not ultimately become an acquisition target itselfand that will require acquisitions. “Tundra was only one of the steps that obviously would have lead to accelerating and executing our strategy,” he said. “There are multiple things that can be done over time. Two moves could be just as well suited, if not better suited to execute that strategy than one move that is overpriced.”
Fink said that Gennum, which makes semiconductor components for advanced video broadcast and data communication technologies, will continue to launch a slew of new products (it unveiled 11 at the National Assocation’s of Broadcasters’ NAB Showin mid-April) as well as hunt for other acquisitions.
But one gets the impression that reaching Fink’s goal of making Gennum one of the top 10 semiconductor design companies in the world by market cap will be a harder slog without Tundra.