InvenSense Inc., the California-based leading provider of MEMS sensor platforms, is, among other strategic alternatives, exploring the option of selling itself, sources privy to the information disclosed on October 28.
InvenSense Inc. manufactures motion sensors for companies such as Apple Inc and Samsung Electronics Co., and designs gyroscopes for smart phones that assist in calculation of motion.
The sources, requesting not to be identified owing to the confidential nature of the deliberations, claimed that InvenSense was working in collaboration with an investment bank to analyze its strategic options, adding that Chinese and Japanese companies were among the parties interested in the sale process. However, they also maintained that there was no assurance of the process culminating in a deal. Meanwhile, InvenSense officials could not be contacted for comment.
If the sale deal succeeds, InvenSense would be the latest company swept by the prevalent trend of consolidation in the industry. The trend has picked up pace as smart phone chip-manufacturers seek scale in the face of intense price competition.
Only this week, smart phone chip manufacturer Qualcomm Inc. acquired NXP Semiconductors N.V. for roughly $38 billion, the largest deal in the semiconductor industry.
By Friday afternoon, InvenSense shares had increased by 13 percent and the company was trading up by 61 cents at $7.48, resulting in $700 million market capitalization. The company got a boost in August when Pacific Crest Securities upgraded the rating on its stocks, claiming that gyroscopes were essential in mobile phones for augmented reality games such as Pokemon Go.
Behrooz Abdi, the chief executive at InvenSense, had taken up the Pokemon Go opportunity on the company’s last earnings call in July. He had claimed that the demand for the company’s gyroscope products would surge with increased number of consumers playing games that involved moving around with their phones.
Similarly, according to a research note last month by Northland Capital Markets analyst Tom Sepenzis, InvenSense prospects were assisted by the growth of virtual reality, especially in China.
“InvenSense is certainly well positioned as there are no Chinese companies offering gyroscopes,” Sepenzis said.
More information can be found at: REUTERS.