Source: PMC-Sierra.

What: Shares of PMC-Sierra (NASDAQ: PMCS) soared 33% higher on Tuesday morning, following a confirmed buyout bid from fellow semiconductor maker Skyworks Solutions (NASDAQ:SWKS). PMC-Sierra shares haven't traded at these levels since 2006.

So what: In an all-cash transaction, Skyworks wants to buy PMC-Sierra for $10.50 per share. The bid works out to approximately $2.0 billion, including PMC-Sierra's $73 million of net cash on hand. The offer has been approved by both companies' boards of directors, and should close in the first half of 2016, assuming that PMC-Sierra shareholders and regulatory reviews give their go-aheads.

Now what: This acquisition is a play on the big data market, where PMC-Sierra's storage and networking products fill gaps in Skyworks' current portfolio.

"PMC enables us to substantially expand our serviceable market within some of the fastest growing segments in technology including cloud storage and optical networking," said Skyworks CEO David Aldrich in a press statement.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

And the deal should immediately start adding to Skyworks' bottom line. PMC-Sierra should add something like $0.75 per share to Skyworks' annual earnings, including the effect of $75 million in operational synergies. To put that boost into perspective, Skyworks can look back at trailing earnings of $3.83 per diluted share these days. PMC-Sierra should also boost its new owner's annual sales by roughly 17%.

Investors seem to be skeptical about the value of this deal. On Monday night, the market caps of these two companies added up to $17.1 billion. On Tuesday, accounting for PMC-Sierra's 33% jump and a 5% decline in Skyworks shares, the combined value has fallen by $0.3 billion.

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