Needham & Company Maintains a 'Buy' on Mindspeed Technologies (MSPD); Pre-Announces F1Q12 (Dec) Results and Announces Acquisition of Picochip

Needham & Company maintains a 'Buy' on Mindspeed Technologies (NASDAQ: MSPD) price target of $7.00.

Needham analyst says, "Though its core business continues to experience a weaker-than-expected demand environment, which forced the company to pre-announce F1Q12 results, Mindspeed announced the acquisition of Picochip, the leader in the 3G/HSPA femtocell SoC market, for aggregate consideration of $51.8MM plus a potential earnout. We see a strong strategic fit between the businesses. Picochip has a leadership position in the 3G/HSPA femtocell SoC market, while Mindspeed has a broad pipeline of LTE small cell design engagements. We believe the combined company will have the broadest product offering for the 3G/4G small cell market and we expect Mindspeed will leverage Picochip’s hardened 3G software to its Transcede platform to develop multi-mode 3G/4G solutions for the femto, enterprise and picocell markets." (Needham lowers FY12 EPS estimate from $0.10 to (0.15) and FY13 from $0.50 to $0.38)

For an analyst ratings summary and ratings history on Mindspeed Technologies click here. For more ratings news on Mindspeed Technologies click here.

Shares of Mindspeed Technologies closed at $5.04 yesterday.

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