United Kingdom : Acquisition of Kopin Wireless for $75 million, placing to raise £16.5 million and trading update [TendersInfo (India)]
(TendersInfo (India) Via Acquire Media NewsEdge) IQE plc, has agreed to acquire the compound semiconductor ( CS ) epiwafer manufacturing business ( Kopin Wireless ) of Kopin Corporation ( Kopin ) for total consideration of $75 million in cash (the Acquisition ).
Kopin Wireless is the leading global manufacturer of heterojunction bipolar transistor ( HBT ) materials which are used in power amplifiers ( PA ), a key wireless component in mobile devices. These are produced using Metal Organic Chemical Vapour Deposition ( MOCVD ) epitaxial wafer technology.
$60 million payable in cash ( Initial Consideration ) to Kopin on completion of the Acquisition ( Completion ) and $15 million payable in cash to Kopin on the third anniversary of Completion ( Deferred Consideration )
Significantly extends IQE s market share and leadership in wireless industry supply and delivers a market leading position in MOCVD HBT
Builds substantially on IQE s risk mitigation strategy in wireless - adding Skyworks Solutions, Inc. ( Skyworks ), which has a long standing supply agreement with Kopin Wireless, as a major customer
Taiwan manufacturing facility adds to IQE s global manufacturing footprint and will provide the Group with a strong position to access the growing Asian semiconductor market Attractive terms - earnings enhancing from 2013 financial year onwards Significant cost synergies of at least £7 million per annum expected from 2014
New banking facility with HSBC for $40 million;
$20 million will be funded from the £16.5 million proceeds of the Placing;
Organic cash flow to pay the Deferred Consideration of $15 million payable in January 2016
IQE intends to raise approximately £16.5 million through a placing by the Joint Bookrunners, Espirito Santo Investment Bank and Canaccord Genuity Limited, of 56,900,961 new ordinary shares ( Placing Shares ) at a price of 29 pence per Placing Share (the Placing Price ) (the Placing );
The Placing Shares represent approximately 8.82 per cent. of the Group s enlarged share capital following Admission;
The Placing Price represents a discount of approximately 0.85 per cent. to the closing mid-market price of IQE s ordinary shares of 29.25 pence on 9 January 2013, being the last practicable date before this announcement;
The books for the Placing will open with immediate effect and are expected to close no later than 4.30 p.m. today
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