Please ensure Javascript is enabled for purposes of website accessibility

Why Silicon Laboratories Stock Jumped Today

By Chris Neiger - Updated Apr 23, 2021 at 11:04AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company just announced the sale of one of its businesses.

What happened 

Shares of Silicon Laboratories (SLAB -7.09%) jumped today after the company announced yesterday that it's selling its infrastructure and automotive business to Skyworks Solutions (SWKS 3.00%).  

Silicon Laboratories' share price gained as much as 12% this morning, but the tech stock leveled off a bit a few hours later and was up 8% as of 11:37 a.m. EDT. Skyworks' stock gained about 4% on the news.  

So what 

Silicon Laboratories said that it will sell its infrastructure and automotive business for $2.75 billion and return about $2 billion of that to its shareholders after the all-cash deal closes.

An orange line on top of a blue bar graph.

Image source: Getty Images.

The sale will give Skyworks all of Silicon Laboratories' "power/isolation, timing and broadcast products, intellectual property and associated employees," the company said.

Skyworks' CEO Liam Griffin said in statement, "This acquisition will broadly expand our capabilities across high-growth end markets including automotive, communications and industrial, creating new and highly compelling opportunities for Skyworks."

Silicon Laboratories says that after taxes and transaction fees, the company expects the net proceeds from the sale to be $2.3 billion. The company will then return about $2 billion to shareholders through a combination of special dividends and/or share repurchases. The company expects the deal to close in the third quarter of this year. 

Now what 

Silicon Laboratories investors have already been optimistic about the company's prospects and have pushed the company's share price up 75% over the past 12 months. And this latest news, which should add more value to shareholders, gives investors even more reason to like Silicon Laboratories' stock right now.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Silicon Laboratories Inc. Stock Quote
Silicon Laboratories Inc.
SLAB
$119.29 (-7.09%) $-9.10
Skyworks Solutions, Inc. Stock Quote
Skyworks Solutions, Inc.
SWKS
$93.85 (3.00%) $2.73

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.