Acquisition of SYNA Expands Opportunity, But It‘s a Departure from DC Narrative

Research evidence excerpt

Acquisition of SYNA Expands Opportunity, But It‘s a Departure from DC Narrative

ly vs SYNA’s $30-60 standalone

content. Active hyperscaler engagement alongside another customer already shipping humanoid

platforms reinforces that demand is emerging across robotics and industrial ecosystems. The deal

is all-stock with modest EPS accretion (~18 months post-close). That said, we think the narrative is

more about mix shift than near-term earnings power, and ultimately view the transaction as unlikely

to be a major driver of the stock.

Deal Specifics: ON agreed to acquire SYNA in an all-stock transaction, representing a total EV of

~$7B, with SYNA shareholders receiving 1.350 shares of ON common stock for each SYNA share

at a fixed exchange ratio (~19% premium to the 10-day VWAP of both stocks). The acquisition is

intended to extend ON beyond its core power and sensing franchise into Edge AI and connected

compute. The deal is also expected to grow ON's TAM by $30B to $243B by 2030. Pro forma

ownership will be split ~88% ON and 12% SYNA on a fully diluted basis, with one SYNA board

member expected to join ON's BoD. The deal is expected to deliver ~$200M in annual synergies

(85-90% opex, mostly SG&A) and be accretive to non-GAAP EPS within 18 months post-close, with

GMs consistent with ON's LT financial model. On a pro-forma basis, the combined company is

expected to generate $7.8B in revenue, $3.3B in gross profit (42% GM), and $1.7B in operating profit Blayne Curtis * | Equity Analyst

(22% OM), with pro-forma gross debt of $5.4B, cash of $4.2B, net debt of $1.2B, and Net Debt/LTM +1 (212) 336-7493 | bcurtis@jefferies.com

adj. EBITDA of 0.6x at announcement. Closing is anticipated in mid-2027, with ON committed to Crawford Clarke, CFA * | Equity Associate