Renesas' $339 Million Acquisition of GaN Company Transphorm has Reached a Definitive Agreement
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Update time : 2024-01-18 10:23:12
Pursuant to the agreement, the Renesas subsidiary will acquire all of the outstanding shares of common stock of Transphorm for $5.10 per share in cash, which represents a premium of approximately 35% to Transphorm's closing price on January 10, 2024, a premium of approximately 56% to the volume-weighted average price for the past twelve months, and a premium of approximately 78% to the volume-weighted average price for the past six months.
The transaction is understood to value Transphorm at approximately $339 million. For its part, Renesas Electronics said that the completion of the acquisition will provide the company with in-house technology for GaN, thereby expanding its presence in fast-growing markets such as electric vehicles, computing (data centers, artificial intelligence, infrastructure), renewable energy, industrial power supplies, and fast chargers/adapters.
The demand for efficient power systems, the cornerstone of carbon neutrality, is increasing. In response to this trend, related industries are transitioning to wide-bandwidth-gain (WBG) materials represented by silicon carbide (SiC) and GaN. These advanced materials offer a wider range of voltages and switching frequencies than conventional silicon-based devices.
In May 2023, Renesas President and CEO Hidetoshi Shibata said at an online strategy briefing that it will start investing in SiC power semiconductors from 2023, and that the company aims to start mass production in 2025, with Renesas Electronics' own SiC production line currently under construction. In addition to building its own SiC production line, Renesas Electronics also signed a 10-year SiC wafer supply agreement in July 2023 with Wolfspeed.
The acquisition of Transphorm is Renesas Electronics' layout in GaN, with the goal of utilizing Transphorm's expertise in GaN to further expand Renesas' WBG product lineup. Like SiC, GaN is an emerging material, with the latter enabling higher switching frequencies, lower power losses and smaller form factors. These advantages enable systems with higher efficiency, smaller and lighter structures, and lower overall costs. Renesas will use Transphorm's automotive-grade GaN technology to develop new and enhanced power solutions, such as X-in-1 powertrain solutions for electric vehicles, as well as solutions for computing, energy, industrial and consumer applications.
In connection with the acquisition, Transphorm's board of directors has now unanimously approved the definitive agreement and recommended that Transphorm's shareholders approve the definitive transaction and ratify the merger. In conjunction with the signing of this definitive agreement, KKR Phorm Investors L.P., which owns approximately 38.6% of Transphorm's outstanding common stock, has entered into a customary voting agreement with Renesas in support of the transaction.
It is understood that the transaction is expected to close in the second half of 2024, subject to the approval of Transphorm's shareholders, regulatory clearances and the satisfaction of other customary closing conditions.
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