Oct 07, 2015 11:08 AM EDT

Skyworks Expecting $880M Sales Amid PMC-Sierra $2B Purchase

Skyworks Solutions has agreed to not just buy data center chip provider PMC-Sierra but to buy the company for $2 billion in cash.

According to Fortune, though Skyworks Solutions Inc.'s cash deal is odd, it is actually for the benefit of the chip maker which is aspiring to become bigger in the market.

Skyworks CEO David Aldrich said in a conference call that the deal would help the company enter new markets through PMC. The company is also expecting a boost on its market opportunities, believing that these will grow because more and more enterprises are tapping the cloud for data analysis.

Additionally, the $2 billion deal is also expected to be a great help to Skyworks, which at the moment is seeking to optimally diversify its portfolio.

Bloomberg has learned through data it has gathered for the past year that semiconductor businesses have amassed a total of 39 deals amounting to $83.5 billion while they try to consolidate given the stiffer competition in the market.

Skyworks has joined a number of business including Dialog Semiconductor Plc., Avago Technologies Ltd. and Intel Corp. in this big move.

Skyworks' decision is considered as the fifth largest acquisition in the past year.

In the first 12 months that it has bought PMC, Skyworks could be looking at a $75 million worth combined annual savings.

Since the multi-billion deal news emerged, Bank of America has lifted the price objective son shares of Skyworks to $125 from $115.

In light of the purchase deal, Skyworks is reportedly expecting an $880 million revenue and a pro forma net income of $1.52 per share, according to LidTime.

The Skyworks-PMC deal is reportedly closing in the first half of 2016.

On Monday, shares of the Woburn, Massachusetts-based company reportedly rose by 13 percent.

Updates about Skyworks' latest acquisition will arrive soon, so stay tuned.

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