• Guest, The rules for the P & N subforum have been updated to prohibit "ad hominem" or personal attacks against other posters. See the full details in the post "Politics and News Rules & Guidelines."
  • Community Question: What makes a good motherboard?

Discussion AMD Acquires Xilinx

DisEnchantment

Senior member
Mar 3, 2017
698
1,615
106

Straight from the Horse's mouth
Strategic transaction strengthens AMD’s industry-leading technology portfolio

  • Expands AMD’s rapidly growing data center business
  • Xilinx, the No. 1 provider of adaptive computing solutions, increases AMD TAM to $110 billion
  • Immediately accretive to AMD margins, cash flow and EPS
  • All stock transaction with combined enterprise value of approximately $135 billion
All stock. No Cash. Could not have been a better way to make use of that inflated market valuation.
Lots of people were questioning AMD why they are not capitalizing on their Market valuation. But this is it.
Management and Board of Directors
Dr. Lisa Su will lead the combined company as CEO. Xilinx President and CEO, Victor Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction. In addition, at least two Xilinx directors will join the AMD Board of Directors upon closing.
They got decent advisors too.
Advisors
Credit Suisse and DBO Partners are acting as financial advisors to AMD and Latham & Watkins LLP is serving as its legal advisor. Morgan Stanley is acting as lead financial advisor to Xilinx. BofA Securities is also acting as a financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.
Ex AMD rejoins the family bringing Xilinx with him
“We are excited to join the AMD family. Our shared cultures of innovation, excellence and collaboration make this an ideal combination. Together, we will lead the new era of high performance and adaptive computing,” said Victor Peng, Xilinx president and CEO. “Our leading FPGAs, Adaptive SoCs, accelerator and SmartNIC solutions enable innovation from the cloud, to the edge and end devices. We empower our customers to deploy differentiated platforms to market faster, and with optimal efficiency and performance. Joining together with AMD will help accelerate growth in our data center business and enable us to pursue a broader customer base across more markets.”
 
Last edited:

DrMrLordX

Lifer
Apr 27, 2000
16,621
5,631
136
The mouse buys the lion? I guess that's what happens when you give the mouse a bunch of market valuation. Great hoogeldy moogeldy.

Things just got . . . complicated.
 

Jimzz

Diamond Member
Oct 23, 2012
4,354
149
106
AMD is 3x bigger than Xilinx so not really.
Not in terms of revenue.
Market Cap is not a good way to look at a company. MC can be affected by things outside the control of a company and many are way over valued in MC, see Tesla for 1.
Xilinx also has a much better P/E ratio.

AMD is more flashy but Xilinx makes a lot of money without drawing attention. I also think AMD is overvalued right now so this is a good time to throw stock at growth areas since this will cost very little cash to make happen. Weather it pans out is debatable though IMO.
 

dzoni2k2

Member
Sep 30, 2009
153
196
116
Not in terms of revenue.
Market Cap is not a good way to look at a company. MC can be affected by things outside the control of a company and many are way over valued in MC, see Tesla for 1.
Xilinx also has a much better P/E ratio.

AMD is more flashy but Xilinx makes a lot of money without drawing attention. I also think AMD is overvalued right now so this is a good time to throw stock at growth areas since this will cost very little cash to make happen. Weather it pans out is debatable though IMO.
Oh I agree with everything you wrote it's just not a mouse lion type of transaction.
 
  • Like
Reactions: Jimzz

DrMrLordX

Lifer
Apr 27, 2000
16,621
5,631
136
Actually, according to some cursory searching, Xilinx only managed $3.09 billion in revenue in 2019 vs. AMD's reported revenue of $6.73 billion. I had thought Xilinx was bigger than that.
 

rainy

Senior member
Jul 17, 2013
448
288
136
Actually, according to some cursory searching, Xilinx only managed $3.09 billion in revenue in 2019 vs. AMD's reported revenue of $6.73 billion. I had thought Xilinx was bigger than that.
AMD revenue is indeed much higher than Xilinx, however they had in 2019 793 M of net income vs 341 M.
https://www.macrotrends.net/stocks/charts/AMD/amd/net-income
https://www.macrotrends.net/stocks/charts/XLNX/xilinx/net-income

Btw, AMD posted a great Q3: https://www.globenewswire.com/news-release/2020/10/27/2114937/0/en/AMD-Reports-Third-Quarter-2020-Financial-Results.html
 
Last edited:

moinmoin

Platinum Member
Jun 1, 2017
2,059
2,461
106
That was faster than expected. Points to a well prepared mutual MA.

With Dan McNamara already at AMD there should be knowledge and experience both how to run the FPGA independently (as Intel does with Altera) but make better use of synergies which I expect to be easier to realize at AMD than it has been at Intel.

All stock. No Cash.
Doesn't that make it more of a merger than an acquisition?

Edit: From the announcement:
Post-closing, current AMD stockholders will own approximately 74 percent of the combined company on a fully diluted basis, while Xilinx stockholders will own approximately 26 percent. The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
 
Last edited:

HurleyBird

Platinum Member
Apr 22, 2003
2,224
657
136
I don't know if I would describe AMD's market valuation 'inflated' because they look like they have a very solid path to growth for several years ...

New semi-custom contracts, Intel's manufacturing group, performance leadership in both client and enterprise ...
It looks less inflated now considering the Q3 results, for sure.
 

amrnuke

Senior member
Apr 24, 2019
985
1,480
96
I don't know if I would describe AMD's market valuation 'inflated' because they look like they have a very solid path to growth for several years ...

New semi-custom contracts, Intel's manufacturing group, performance leadership in both client and enterprise ...
Taking a 4% bath today, but it's a reasonable bet to stick with AMD long-term after this merger given that we haven't even seen release or reviews of two potentially great products in the next month.
 

moinmoin

Platinum Member
Jun 1, 2017
2,059
2,461
106
Taking a 4% bath today, but it's a reasonable bet to stick with AMD long-term after this merger given that we haven't even seen release or reviews of two potentially great products in the next month.
It's a pretty interesting timing for the announcement, right before great quarter results and a couple major launches (not only Ryzen 5000 and RDNA2, but also the consoles and Milan). If all those launches go well AMD's stock is bound to go up further, making the merger worth even more to the Xilinx shareholders.
 

Hitman928

Diamond Member
Apr 15, 2012
3,190
3,195
136
It's a pretty interesting timing for the announcement, right before great quarter results and a couple major launches (not only Ryzen 5000 and RDNA2, but also the consoles and Milan). If all those launches go well AMD's stock is bound to go up further, making the merger worth even more to the Xilinx shareholders.
Yeah, it's actually a value transaction for Xilinx shareholders even by today's standards, they would be getting AMD shares at a decent discount based upon today's prices. Who knows what will happen in the future, but if AMD continues to grow, then it could be a really, really nice payday for Xilinx shareholders. They lose their dividend, but the dividend yield wasn't that great anyway so they'll probably have way more upfront returns than their dividend would pay over the next few years. Of course AMD's stock could crash and all of a sudden it would be a terrible deal, but I don't see a huge crash happening within the next 12 months, not without the whole market crashing along with it.
 

Ajay

Diamond Member
Jan 8, 2001
7,567
2,719
136
Great for AMD's custom business, with more to offer (custom FPGA/ASIC chiplets). Great for server and HPC sales with more 'in house' component offerings and, hopefully, a better integrated hardware stack. Looks like good business plan, guess we'll see how it pans out over the next 5 years.
 

moinmoin

Platinum Member
Jun 1, 2017
2,059
2,461
106
There has been extensive SEC fillings about Xilinx's internal communication regarding the merger (yes, it's called merger in some slides). Quite worth the read if you want some more insight:

https://www.reddit.com/r/AMD_Stock/comments/jlii6w
Most interesting is the long transcription of the event by Peng and Su:

Apparently both have been in quarterly talks for cooperation since when Peng attended the Epyc launch event back in 2017, even before Peng moved up Xilinx's rank as CEO.
 
Last edited:
Thread starter Similar threads Forum Replies Date
tamz_msc CPUs and Overclocking 77

ASK THE COMMUNITY