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Cree Buys Assets Of Infineon RF Power Business For EUR 345 Mln - Quick Facts

Cree, Inc. (CREE) said it has acquired assets of Infineon Technologies AG's (IFNNY) Radio Frequency or RF Power Business for about 345 million euros. Infineon Technologies is a German manufacturer of semiconductors and system solutions.

Cree noted that the transaction, which has closed and is effective today, will expand the Cree Wolfspeed business unit's wireless market opportunity.

According to Cree, this business holds a leading market position offering transistors and Monolithic Microwave Integrated Circuitsor or MMICs for wireless infrastructure radio frequency power amplifiers based on both LDMOS and Gallium Nitride on Silicon Carbide (GaN-on-SiC) technologies.

"The acquisition strengthens Wolfspeed's leadership position in RF GaN-on-SiC technologies, as well as provides access to additional markets, customers and packaging expertise. This is a key element of Cree's growth strategy and positions Wolfspeed to enable faster 4G networks and the revolutionary transition to 5G," said Cree CEO Gregg Lowe.

The transaction includes Infineon's RF Power operations' main facility in Morgan Hill, California, which includes packaging and test operations for LDMOS and GaN-on-SiC; and about 260 employees in the U.S. locations, Morgan Hill and Chandler in Arizona, as well as in Finland, Sweden, China and South Korea.

The transaction also includes a transition service agreement to ensure business continuity as well as a smooth transition under which Infineon will perform substantially all business operations for approximately the next 90 days.

Infineon will support the transaction with a long-term supply agreement for LDMOS wafers and related components out of its fab in Regensburg, Germany, and will also supply assembly and test services out of its facility in Melaka, Malaysia.

Cree funded the 345 million euros from cash and borrowings on its revolving line of credit. The Infineon RF Power business will become part of Cree's Wolfspeed operating segment and is targeted to increase annual revenues by about $115 million in the first twelve months post acquisition.

The acquisition is also targeted to be accretive to Cree's adjusted earnings per share in its first full quarter of operations with Cree, which will be the company's fiscal fourth quarter ending June 24, 2018.

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