Friday, June 5, 2015

4 Tech M&A Deals to Play While Google Decides if It Wants to Buy Twitter

NEW YORK (TheStreet) -- Forget whether Google (GOOGL) should buy Twitter (TWTR) -- there are plenty of other tech deals on the horizon.
On Wednesday, Chris Sacca of Lowercase Capital penned an 8,500-word blog post on the future of 140-character social network Twitter. In an interview with CNBC, he went as far as to say he believes it would be a great buy for Google. Sacca's comments, naturally, spurred quite a bit of buzz.
While a Google-Twitter acquisition would certainly be big news, there is little indication that a concrete transaction in the works. There are, however, a number of other big technology and telecommunications deals in the pipeline.
The industry has witnessed a number of big-name acquisitions in recent months, including Facebook's (FB) $19 billion buy of messaging app WhatsApp and online real estate platform Zillow's (Z) $2.5 billion purchase of competitor Trulia. And there is much more to come.
Looking for tech and telecom stocks? Here are four you may want to consider before they get scooped up. You probably want to take a look at their acquirers, too.
AOL
On May 12, Verizon (VZ - Get Report) announced plans to buy AOL (AOL - Get Report) in a deal worth about $4.4 billion. AOL CEO Tim Armstrong, who will remain with the company, told CNN that the combination will open new growth opportunities for both companies amid a shift toward mobile.
Verizon stands to inherit AOL's powerful video assets as well as its subscription business and programmatic advertising platforms. It will also pick up its portfolio of global content brands, including TechCrunch and Engadget. It could also get The Huffington Post, which AOL acquired in 2011, though whether that will happen remains unclear.
The deal is expected to close this summer, pending regulatory approvals. Verizon is set to pay $50 per share for AOL, which at market close Thursday was trading at $50.05. Shares are currently flat.

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Broadcom


In late May, Avago Technologies (AVGO - Get Report) agreed to buy Broadcom (BRCM) for $37 billion, paving the way for the biggest technology acquisition ever. Together, the two will form the third-largest semiconductor supplier in the United States, and the combined company will have a $77 billion enterprise value.
The deal is nearly double the size of that announced by NXP Semiconductors  (NXPI) and Freescale Semiconductor (FSL) in March, for which the combined company is expected to be worth $40 billion.
Avago will pay $17 billion in cash and $20 billion in stock for Broadcom, valuing it at $54.50 per share -- slightly above Thursday's closing price of $54.22. Shares are at $54 Friday.
Altera

While a deal between Intel (INTC - Get Report) and Altera (ALTR) has been in the works for months, some suggest the Broadcom-Avago deal may have pushed along an announcement. Whatever the case, on Monday, Intel revealed it would buy Altera in an all-cash transaction valued at $16.7 billion.
Altera, a semiconductor company and chipmaker, fits into Intel's data center and Internet of Things segments. Intel will offer Altera's FPGA products (programmable chips to carry out specialized tasks) with its processors and will also make improvements to the design and manufacturing of Altera's products.
Intel expects to close the transaction within six to nine months and will pay $54 per share. At market close Thursday, Altera was priced at $51.44. Shares are flat Friday.

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DirecTV

AT&T's (T - Get Report) acquisition of DirecTV (DTV) has been in the works for over a year. The agreement has been approved by both companies' boards of directors, but the regulatory go-ahead is still pending.
Reports indicate that the Federal Communications Commission is likely to approve the deal -- provided AT&T make a few concessions. Namely, the telecom company must abide by the FCC's new net neutrality rules, which it has previously opposed.
If and when AT&T's DirecTV bid is approved, it will position the company to become a leader in content distribution across mobile, video and broadband platforms. The deal values DirecTV at $95 per share. At market close Thursday, it was trading at $92.21. Shares are at $91.75 Friday.

By Emily Stewart

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