$300 Million Deal: Cree to Sell LED Business to SMART Global Holdings

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Cree expects receive an initial cash payment of $50 million upon closing and $125 million to be paid upon maturity of a seller note issued by SMART to Cree due August 2023

Cree announced that the company has entered into a definitive agreement to sell its LED Products business unit (Cree LED) to SMART Global Holdings, for up to $300 million, including fixed upfront and deferred payments and contingent consideration. The former expects to receive an initial cash payment of $50 million upon closing and $125 million to be paid upon maturity of a seller note issued by SMART to Cree due August 2023.

“We are pleased to announce the sale of our LED Products business to SMART, which represents another key milestone in our transformational journey to create a pure-play global semiconductor powerhouse,” said Cree CEO Gregg Lowe.

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Lowe added, “This transaction uniquely positions us with a sharpened strategic focus to lead the industry transition from silicon to silicon carbide and further strengthens our financial position, which will support continued investments to capitalize on multi-decade growth opportunities across EV, 5G and industrial applications. SMART has a strong platform and a solid track record of successfully acquiring and integrating technology businesses.”

LED chips and components

Cree LED has one of the industry’s widest portfolios of highly efficient LED chips and high-performance LED components. SMART is a global leader in specialty memory, storage and high-performance computing solutions serving the electronics industry for over 30 years.

“Leveraging SMART’s diverse customer base and global operations, Cree LED will be well positioned to continue to deliver industry leading products,” read company’s official statement. In connection with the transaction, Morgan Stanley & Co. LLC is acting as financial advisor and Smith Anderson is acting as legal advisor to Cree.

“We are thrilled to welcome Cree LED to the SMART family,” said Mark Adams, President and CEO of SMART Global Holdings.

Adams added, “As the leader in LED lighting technology with a highly respected brand and expansive patent portfolio, Cree has a track record of delivering best-in-class solutions and I am very excited about the opportunities that lie ahead for Cree LED as part of the SMART portfolio of products.”

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