Microsemi Changes Strategy on Units

Reversing its previous acquisition strategy, Microsemi Corp. said Wednesday that it will sell, consolidate or reorganize several operations unrelated to the company’s core semiconductor business.

The Santa Ana firm said the move is a bid to “refocus” its growth by divesting non-chip operations while seeking acquisitions in the semiconductor field. The operations targeted for sale or reorganization could represent more than 20% of the firm’s fiscal 1988 revenue of $83.7 million, said David R. Sonksen, vice president of finance.

Sonksen declined to specify which businesses will be sold or consolidated with other operations.

“We have been looking for buyers,” he said. “These businesses don’t meet our profit objectives.”

In recent years, Microsemi has tried to expand by acquiring technology businesses that complemented its core business of selling custom semiconductors for use in defense, aerospace, communications and medical applications.

Several of the operations were losing money when Microsemi bought them and have not become profitable as quickly as the company had hoped.

Microsemi said its plan is meant to stress its core business, “which has historically provided steady growth and strong predictable profits.”

For the six months ended April 2, Microsemi’s revenue rose 45%, to $51.9 million, while earnings were up 70%, to $1.7 million.