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Diodes to acquire Lite-On Semiconductor

Monday, August 12, 2019

Diodes and Lite-On Semiconductor (LSC) have entered into an agreement that provides for the acquisition of the Taiwan-based discrete and analog chipmaker by the US vendor, according to the companies.

At the effective date of the transaction, each share of LSC stock will be converted into the right to receive NT$42.50 in cash, or US$1.37, as of June 30, 2019 without interest. The aggregate consideration will be approximately US$428 million. The price per share reflects a premium of 35% over LSC's 30-day volume-weighted average price.

The boards of both companies have approved the transaction, which is still subject to approval by LSC shareholders as well as other customary closing conditions and regulatory approvals. The transaction is expected to close in April, 2020.

"In combination with our strong organic growth, this proposed acquisition underscores Diodes' use of acquisitions to accelerate the attainment of our next strategic goal of US$2.5 billion in annual revenue and US$1.0 billion in annual gross profit by 2025," said Diodes president and CEO Keh-Shew Lu. "This transaction will expand our discrete business in Asia, complementing our existing product lines with offerings at additional price points, especially for cost-sensitive applications."

"LSC's contact image sensor business also extends Diodes' footprint, representing a new market where Diodes can participate," Lu continued. "Additionally, LSC's wafer fabs and assembly sites provide Diodes with incremental manufacturing capacity as well as the opportunity for increased manufacturing flexibility and cross-regional internal dual-sourcing."

"Further, this acquisition accelerates our share repurchase activities, recapturing over 15.3% of Diodes outstanding shares currently held by LSC," Lu indicated. "In addition, it provides a positive return on investment for LSC's 31.2% ownership in On-Bright Electronics. The transaction also meets our criteria for strategic acquisitions and is expected to be immediately accretive to our earnings."

By: DocMemory
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