, Columnist
Qualcomm Was Right About Being Undervalued
The chipmaker has said Broadcom's takeover proposal undervalues it. The latest deal in the industry helps prove its point.
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Broadcom Ltd. and Qualcomm Inc. should take note of this small(er) semiconductor deal.
Marvell Technology Group Ltd. on Monday said it's acquiring Cavium Inc., a maker of networking processors, for about $6.3 billion including debt. It's a far cry from the more than $85 billion bid Broadcom made earlier this month for Qualcomm, but even at this smaller scale, the valuation math is telling. Marvell's bid appraises Cavium at 14 times its estimated fiscal 2018 Ebitda. Broadcom's offer, which Qualcomm rejected as too low, works out to a multiple of about 12.5 times on the same basis. This calculation excludes Qualcomm's pending acquisition of NXP Semiconductors NV (more on that later) and assumes a more normalized balance sheet.1511191771012