TGCC Case Competition Regional Case Study.pdf

Case Competiton

1. Tiger Global Case
Competition
Regional Case Study
[email protected]
[email protected]

2. Objectives Synergies Financials
Objectives
Mitigate weaknesses of either businesses & bolster their combined strengths
01
Target Company
Horizontal Acquisition Strategy
Increase in talent & human capital from around
the world; make Renesas more cosmopolitan
Go-to-Market strategy, to create complementary
product mix; synergistic product combination
Consistent with Renesas' acquisition strategy;
focus on analog & mixed signal technologies
Global expansion; increase distribution channels of
products & to enter foreign markets
Gain greater market control over MCUs & MPUs in
growing Automotive & Electric Vehicle industry
Avoid extra potential geopolitical issues &
unnecessary risk
Increase shares in fast-growing data economy-
related markets; Infrastructure & Data Center
Achieve greater economies of scale by specializing
in a product offering & increase efficiency
Acquisition Advantage

3. 02
Apere Computing
POTENTIAL
COMPANIES TO
ACQUIRE
Company Comparisons
Cohu Inc.
Semtech Corp.
Ambarella Inc.
Diodes Inc.
Tower
Semiconductor Ltd.
Objectives Synergies FinancialsTarget Company Acquisition Advantage

4. 03
Overview of Semtech Corporation
Founded: 1960
Employees: Approximately 1,388 employees
Headquarters: Camarillo, California, United States
Listing: Nasdaq (SMTC)
Core Values: Enthusiasm, Creativity, & Passion for Excellence
Financials (FY2020, USD m, Underlying-basis):
Revenue
Gross Profit
Operating Income
EBITDA
548
336
52
96
(Gross Margin 61.1%)
(Operating Margin 11.7%)
(EBITDA Margin 18.45%)
Objectives Synergies FinancialsTarget Company Acquisition Advantage

5. Objectives Synergies
04
Overview of Semtech Products
Major End Markets
Enterprise Computing
Industrial
High-End Consumer
Communications
Main Product Groups
Signal Integrity
Protection
Wireless & Sensing
Specializes in IoT Applications & new IoT Technologies
Major growing Markets being IoT, Data Centers, & Automotive
FinancialsTarget Company Acquisition Advantage
Product Overview
Wireless RF
Circuit Protection
Signal Integrity
Professional AV
Smart Sensing
Broadcast Video
Power Management
Wireless Charging
High Reliability

6. Objectives Synergies
05
Growth if Renesas Acquires Semtech
FinancialsTarget Company Acquisition Advantage

7. 06
Financial Benefits Pro Forma
&
Revenue
EBITDA
Gross Margin
Operating
Margin
(Non-GAAP) values FY2020
USD 96M
USD 548M
61.6%
11.7%
USD 6,531M
Objectives Synergies FinancialsTarget Company Acquisition Advantage
19.2%
47.3%
USD 2,036M
USD 7,079M
USD 2,132M
48.4%
18.6%

8. Objectives Synergies
07
FinancialsTarget Company Acquisition Advantage
Cost & Revenue Synergies
Expected Costs Synergies Expected Revenue Synergies
Enhanced Product Offering
Renesas' speciality in MCUs, MPUs and SoCs
aligns with Semtech's specialization in analog,
mixed-signals for optimal Winning Combos
offerings
Greater depth in growing markets including IoT,
Industrial, Data Centres
Differentiated and diverse products to a larger
customer base.
R&D
Greater employee base over 13 countries with new
regions being Mexico, Canada, and India.
Leverage on growingdemand for semiconductors
from APAC, with 53% of Semtech's total sales
accounting from China.
Gain of Goodwill: 201 US patents and 187 foreign
patents under Semtech
Enhanced Technologies: Semtech's specialization
in IoTad it's LoRA system as a de facto for IoT
SG&A
Greater supply chain capabilities
More sales channels in new regions
COGS
Greater economies of scale
Scale benefit in distribution margin
DataProcessing, Industrial,
Consumer and
automotive are Semtech's
largest and most growing
markets, aligning with
Ranesas' consistent
acquisition strategies in
expanding into these end
markets.

9. 08
Objectives Synergies FinancialsTarget Company Acquisition Advantage
Target Acquisition Price
Financing Plan
4.1 B USD
without a premium, vs Semtech's current market value of 4.29 B USD.
Proposed payment method: 50% cash in hand and 50% debt financed

10. Objectives Synergies
09
FinancialsTarget Company Acquisition Advantage
EPS ACCRETIVE
Renesas FY2020 EPS of 0.24 to be 0.293 pro forma, assume no new shares issued.
Increased value through synergies.

11. 10
Objectives Synergies FinancialsTarget Company Acquisition Advantage
PRO FORMA CONSOLIDATION
Debt/Equity Pro Forma
Total Assets
Intrinsic Value 29.9 B USD
Renesas FY20
Pro Forma
20.18 B USD
14,630 Mill USD
1.12
15,712 Mill USD
3.8
&

12. Thank You!

13. Appendix
03
DCF Analysis RENESAS

14. Appendix
CAPEX Calculation
Debt/Equity
Non Working Capital

15. RENESAS 3 STATEMENT MODEL

16. Appendix
DCF Analysis SEMTECH

17. Appendix
Fortune Business, 2021, The global semiconductor market is projected to grow from $452.25 billion in 2021 to
$803.15 billion in 2028 at a CAGR of 8.6% in forecast period, 2021-2028
https://www.fortunebusinessinsights.com/semiconductor-market-102365