Skyworks Solutions, Inc. (SWKS: NASDAQ) is a semiconductor company based out of Massachusetts. They manufacture conductors for cell phones, amplifiers, Wi-Fi routers and other wired and wireless RF devices. Their products are used in automotive, broadband, wireless infrastructure, energy management, Global Positioning System, industrial, medical, military, wireless networking, smartphone and tablet applications. Skyworks Solutions is a great target for an LBO as it has strong financials and consistent strong growth. Between FYE 2011-2015 revenue has grown an average of 24% YoY. They also have a clean balance sheet with few fixed assets and costs, no debt, and $1B USD in cash. COGS continue to decline as a percent of revenue and therefore their margins are growing. The company has generated $300MM in free cash flows in the last four quarters. There is high growth in the industry as when wireless products evolve, they use more semiconductors while they continue to get cheaper to manufacture. The market is very competitive and dominated by a few large OEM manufacturers that supply many of the brand name end product makers. Skyworks supplies Apple and many other Fortune 500 firms. …show more content…
driverless cars, biotech etc) we can make a 15X or more exit. Discounting value added, we still believe the stock is significantly undervalued as some competitors with weaker financials trade at multiples closer to 14X. One of the issues we considered was whether Skyworks could keep up with the average growth rate; we firmly believe it can as emerging tech markets will continue to rely heavily on semiconductors as products become more technologically