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TMCNet:  Hi-tech firm IQE buys Kopin Wireless for $75m [Western Mail (Wales)]

[January 17, 2013]

Hi-tech firm IQE buys Kopin Wireless for $75m [Western Mail (Wales)]

(Western Mail (Wales) Via Acquire Media NewsEdge) TECHNOLOGY company IQE yesterday announced that it has completed its deal to buy Kopin Wireless.

The Cardiff-based company, the leading global supplier of advanced semiconductor wafer products and services to the semiconductor industry, announced the $75m deal last week.

In a brief statement issued to the London Stock Exchange yesterday, AIM-listed IQE said: "The Company is delighted to confirm that it has now completed the acquisition." Under the terms of the deal, IQE's third major acquisition in the space of a year, the Cardiff-based company now owns the US business of Kopin Wireless and a 90.2% controlling interest in Kopin Taiwan Corporation.



The deal has seen a $60m up-front payment, with a further $15m to follow in three years' time.

To pay for the deal the Welsh company has placed new shares worth Pounds 16.5m (which will fund $20m of the purchase cost). The remaining $40m of the up-front payment has been funded through a new banking facility with HSBC.

On Monday Canaccord Genuity analysts Bob Liao and Jonathan Imlah re-iterated their buy recommendation on IQE's stock, in light of the acquisition.

They said: "In our view, the acquisition consolidates the market under IQE and adds value to shareholders." Espirito Santo analyst Vijay Anand also rates IQE as a buy in the wake of the deal. He estimates that the deal means that IQE now controls 50-60% of the global epiwafer market.

"The acquisition of Kopin Wireless is a major step in de-risking IQE's prospects in the wireless market," he said. "Furthermore, the enlarged scale creates scope for significant operational synergies.

"Through strategic transactions over the past year, IQE has transformed itself into a well-diversified business and is attractively positioned to benefit from structural growth markets." (c) 2013 ProQuest Information and Learning Company; All Rights Reserved.

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