NEW YORK (TheStreet) -- Atmel Corp. (ATML) shares are higher by 1.56% to $8.49 in Thursday's trading session on heavy trading volume after Dialog Semiconductor (DLGNF) shareholders approved the company's $4.6 billion takeover.
Specifically, 61.9% of Dialog's shareholders voted to support the deal while 38.06% voted against it, Reuters reports.
This action comes after U.K.-based Dialog in September agreed to acquire its peer Atmel in a cash and stock deal.
Immediately following this announcement, analysts commented, "While we see the positive implications in the long term, there will be a lot of integration work in the next two to three years, and that's not without risks," according to Bloomberg.
So far, the deal awaits approval from Atmel's shareholders. The two companies expect the transaction to be completed during the first quarter of 2016.
Based in San Jose, Atmel designs, develops, manufactures, and sells semiconductor integrated circuit products primarily in the U.S., Asia, Europe, South Africa, and Central and South America.
Separately, TheStreet Ratings team rates ATMEL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate ATMEL CORP (ATML) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ATML's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ATML has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for ATMEL CORP is rather high; currently it is at 50.55%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.21% is in-line with the industry average.
- ATMEL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ATMEL CORP turned its bottom line around by earning $0.08 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus $0.08).
- Net operating cash flow has decreased to $30.59 million or 30.28% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ATMEL CORP has marginally lower results.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ATMEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ATML