In its recent statement, Cree announced that it is selling its lighting business to Ideal Industries to continue its strategy of becoming a more focused, powerhouse semiconductor company.
Cree announced the execution of a definitive agreement to sell Cree Lighting, the lighting products business unit, which includes the LED lighting fixtures, lamps, and corporate lighting solutions business for commercial, industrial and consumer applications.
According to Cree, the deal is about US$310 million before tax. The company expects to receive an initial cash payment of US$225 million, subject to purchase price adjustments and has the potential to receive a targeted earn-out payment of approximately US$85 million based on an adjusted EBITDA metric for Cree Lighting over a 12-month period beginning two years after the transaction closes.
“This transaction provides significant resources to help accelerate Wolfspeed’s growth while providing a terrific growth opportunity for the Lighting Business and its employees through an expanded channel that strengthens its market position. We believe this decision benefits the company and our employees, shareholders, and customers as it unlocks value, increases management focus on the core business and supports our mission to accelerate silicon carbide adoption”, commented Gregg Lowe, CEO of Cree.
“Our combined technology and expertise will continue to build on Cree Lighting’s history of leadership and fits with the advanced systems IDEAL has pioneered over the past 103 years,” said Jim James, Chairman and CEO of IDEAL INDUSTRIES, INC. “Together, we will create a powerful combination of innovation, channel strength and operational excellence. We’re acquiring a very special business poised for sustained success, and we look forward to assisting Cree Lighting in realizing its potential.”
The closing of the transaction is anticipated to occur in the fourth quarter of fiscal 2019.
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