Shares of semiconductor company Integrated Device Technology (NASDAQ:IDTI) shot higher on Friday, rising as much as 12.6% on news that it could be bought out by another company. Shares were up 12.3% as of 12:06 pm EDT.
Japanese automotive chipmaker Renesas Electronics is reportedly in negotiations with Integrated Device Technology (IDT) to possibly buy the company.
Renesas Electronics' negotiations with IDT to potentially acquire the company are in "the late stages," according to a report from The Wall Street Journal Friday. "The acquisition, if completed, would be for about $6 billion, a person with direct knowledge of the matter said," wrote the Journal's Takashi Mochizuki. "He said the deal was one of several options being reviewed by the Tokyo-based company and isn't final."
After IDT's stock surged on Friday, the company now has a market capitalization of about $5.5 billion, according to data from Yahoo! Finance.
IDT's auto and industrial segment may be what Renesas Electronics is most attracted to. IDT credited increased demand in the segment as the primary driver of the company's 28% year-over-year revenue growth in its most recently reported quarter.
IDT management expects momentum to continue in fiscal 2019, making the company an attractive acquisition target. "For FY2019, we expect continued diversified revenue growth, coupled with further year-over-year margin expansion," said IDT CEO Greg Waters in the company's fiscal 2018 fourth-quarter earnings release.