Synaptics Inc's (SYNA) shares gained around 3 percent in the after hours trading on Monday after the developer of human interface solutions said it has signed a definitive agreement to acquire Conexant Systems, LLC as well as the Multimedia Solutions Business of Marvell Technology Group (MRVL).
The company will buy Conexant Systems, a privately held provider of voice and audio processing solutions for the smart home, for $300 million in cash and 726,666 shares of Synaptics common stock. For the year 2016, Conexant's net revenue was approximately $104 million.
For the Multimedia Solutions Business, the all-cash transaction is valued at approximately $95 million. The business recorded annual revenues of approximately $94 million.
Synaptics expects both deals to be accretive to its adjusted earnings per share in the first year following the close, excluding transaction related expenses. The acquisitions are expected to close in the third calendar quarter of 2017.
With the deals, Synaptics believes the combination will immediately jumpstart its presence in the smart home market.
The acquisitions are part of Synaptics' long term strategy to extend its human interface leadership into the consumer IoT era. With the acquisitions, Synaptics expects gross margins to be accretive immediately and to increase its total addressable market opportunity by 38 percent or $2.8 billion to $10.3 billion by 2020.
Synaptics shares closed Monday's regular trading at $58.79, down 1.46 percent. In the after hours trading, shares gained 2.5 percent to $60.25.
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