Will InvenSense Inc (NYSE:INVN) Sell To TDK?

InvenSense Inc

InvenSense Inc (NYSE:INVN), a technology supplier of Apple Inc. (NASDAQ:AAPL) and Samsung, could be acquired by TDK Corp (ADR) (OTCMKTS:TTDKY) of Japan.

Story continues below

TDK is an electronic parts company. Acquiring InvenSense would enable TDK to bolster its sensor technology business. The kind of technology InvenSense offers is used in devices such as smartphones to calculate motion and it is increasingly important in enabling augmented reality functionality in such devices.

TDK is making a bid of $12 a share for InvenSense. But the offer price could change because the parties are still negotiating and because rival bids could also tilt the scale.

Potential sources of rival bids

Some of the companies that could place rival offers for InvenSense are Sony and chipmaker Ambarella Inc (NASDAQ:AMBA). Sony Corp (ADR)(NYSE:SNE) could not only use InvenSense’s technologies in its in-house products, but also sell them to third-party electronics devices manufacturers.

Private-equity firms could also step forward with rival bids for InvenSense, other analysts said.

But TDK could grab InvenSense without much opposition because its bid price is widely seen as being on the higher end of analysts’ range of $10.30 – $12.

Application of the technology

Besides smartphones, InvenSense’s technology can be used in drones and autos.

The report of dalliance between InvenSense and TDK comes just about a month after InvenSense said it was retaining a financial adviser to explore strategic options.

The acquisition of InvenSense will add to the recent consolidation in the chip-making sector. The semiconductor industry has been awash with deal-making recently. MACOM Technology (NASDAQ:MTSI) and Applied Micro Circuits Corporation (NASDAQ:AMCC) are working toward a $770 million tie-up. Qualcomm (NASDAQ:QCOM) is in the process of swallowing NXP Semiconductors NV (NASDAQ:NXPI) for $47 billion. Broadcom Ltd (NASDAQ:AVGO) is taking over Brocade Communications Systems, Inc. (NASDAQ:BRCD) for $5.9 billion.

Other high profile mergers in semiconductor space include takeover of Altera by Intel Corporation (NASDAQ:INTC) for $15 billion in mid-2015.

Shares of InvenSense rose more than 1.4% to $10.97 in the last session as news of the takeover by TDK reached the market. But the stock retreated 0.64% in the post-market session.

An ad to help with our costs