Oct 19, 2020
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.
Under the terms of the agreement, which has been approved by the Company’s board of directors, Cree 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. Cree also has the potential to receive an earn-out payment of up to $125 million based on the revenue and gross profit performance of Cree LED in the first full four quarters post-transaction close, also payable in the form of a three-year seller note.
Cree LED has one of the industry’s widest portfolios of highly efficient LED chips and high-performance LED components and represents one of the strongest brands in the industry. 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.
The transaction is subject to required regulatory approvals and satisfaction of customary closing conditions, and is targeted to close in the first calendar quarter of 2021. Following the closing of the transaction, SMART will license and incorporate the Cree LED brand name into the SMART portfolio of businesses.