NEW YORK (AP) -- Shares of BCD Semiconductor Manufacturing Ltd. jumped 90 percent Thursday after Diodes Inc. agreed to buy the company, and Diodes shares also moved higher.
THE SPARK: On Wednesday, semiconductor components maker Diodes agreed to acquire BCD for about $151 million, or $8 per American depositary share. Diodes said the deal will expand its range of power management products and give it a stronger market position in Asia.
THE BIG PICTURE: Diodes' net income has fallen by more than half in the first nine months of 2012 and sales have slipped because of the weak global economy. However the Plano, Texas, company said its sales have been improving sequentially.
THE ANALYSIS: Raymond James analyst J. Steven Smigie said the purchase "looks like an excellent deal to us for Diodes" and fits well into the company's strategy. He said it is also good for BCD shareholders. Smigie maintained a "Strong Buy" rating on Diodes shares.
Sterne Agee analyst Vijay Rakesh said the deal should add to Diodes' net income immediately. He kept a "Buy" rating on the stock.
SHARE ACTION: BCD Semiconductor shares jumped $3.59, or 90 percent, to $7.57 while Diodes shares rose 26 cents to $17.17 in afternoon trading. The broader markets declined less than 1 percent.