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OmniVision Technologies Inc (OVTI) Offered $1.67 Billion Buyout

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By on Company, Technology & Software

OmniVision Technologies just received a buyout offer today from Hua Capital Management.

The investment management company, located in Beijing, China, offered to purchase OmniVision for $29 per share, putting the value of the company as a whole at $1.67 billion. The United States chipmaker’s stock closed at $24.60 on Wednesday, August 13th, meaning that the Chinese investment company’s offer puts a 17.9 percent premium on the stock’s closing price.

OmniVision stated that they are still evaluating the proposal.

OmniVision is a company that specializes in the design, development, and the marketing image sensor technology. The hardware company’s key image sensing products, called CameraChip image sensors, capture an image in an electronic format. The product is used in many consumer and commercial applications, including mobile phones, webcams, and surveillance systems. Omnivision is currently the supplier of the image sensor technology in Apple’s iPhone devices and Samsung’s smartphones.

OmniVision’s shares leapt 13 percent, or $3.26, to $27.85 in midday trading today. At the close of the market on Wednesday, the stock had grown 43 percent over this fiscal year.

In addition to its strong stock growth, the company is doing well in other areas, namely its growth in net income, sound financial situation with reasonable levels of debt, appealing valuation, and continuous cash flow from its operations. However, the company did report low profit margin levels.

Net Income

OmniVision’s growth in net income this quarter in 2014 from the same quarter in 2013 has significantly outpaced the growth rate of the S&P 500 as well as the industry for Semiconductors & Semiconductor Equipment. The company’s net income rose by 68.9 percent to $15.07 million from $8.92 million.

Debt

The company’s ratio for debt to equity is on the low side at 0.04, and is currently below the average of the industry. This means that the company has done very well at managing its debt levels. Additionally, the company also holds a quick ratio fo 3.03, which shows that the company is capable of covering short term cash needs.

Net Operating Cash Flow

The company’s net operating cash flow has increased slightly by quite a bit from the same quarter last year to $62.40 million, up by 610.83 percent. OmniVision Technologies has also significantly exceeded the average cash flow in the industry, which has a growth rate of -11.39 percent.

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