Acquisition Accelerates Renesas’ Wide Bandgap
Expertise and Roadmap to Fast-Growing Market Opportunities for EVs,
Data Centers & AI Power, and Renewable Energy
Renesas Electronics Corporation (“Renesas,” TSE: 6723), a
premier supplier of advanced semiconductor solutions, and
Transphorm, Inc. (“Transphorm,” Nasdaq: TGAN), a global leader in
robust gallium nitride (“GaN”) power semiconductors, today
announced that they have entered into a definitive agreement
pursuant to which a subsidiary of Renesas will acquire all
outstanding shares of Transphorm’s common stock for $5.10 per share
in cash, representing a premium of approximately 35% to
Transphorm’s closing price on January 10, 2024, a premium of
approximately 56% to the volume weighted average price over the
last twelve months and a premium of approximately 78% to the volume
weighted average price over the last six months. The transaction
values Transphorm at approximately $339 million. The acquisition
will provide Renesas with in-house GaN technology, a key
next-generation material for power semiconductors, expanding its
reach into fast-growing markets such as EVs, computing (data
centers, AI, infrastructure), renewable energy, industrial power
conversion and fast chargers/adapters.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240110228822/en/
Transphorm CEO Dr. Primit Parikh and
Renesas CEO Hidetoshi Shibata (Photo: Business Wire)
Demand for highly efficient power systems is increasing as
building blocks for carbon neutrality. To address this trend, an
industry-wide transition toward wide bandgap (“WBG”) materials,
represented by silicon carbide (“SiC”) and GaN, is also being seen.
These advanced materials allow a broader range of voltage and
switching frequency than conventional silicon-based devices. To
build on this momentum, Renesas has announced the establishment of
an in-house SiC production line, supported by a 10 year SiC wafer
supply agreement.
Renesas now aims to further expand its WBG portfolio with
Transphorm’s expertise in GaN, an emerging material that enables
higher switching frequency, lower power losses, and smaller form
factors. These benefits empower customers’ systems with greater
efficiency, smaller and lighter composition, and lower overall
cost. As such, demand for GaN is predicted to grow by more than 50
percent annually, according to an industry study. Renesas will
implement Transphorm’s auto-qualified GaN technology to develop new
enhanced power solution offerings, such as X-in-1 powertrain
solutions for EVs, along with computing, energy, industrial and
consumer applications.
“Transphorm is a company uniquely led by a seasoned team rooted
in GaN power and with origins from the University of California at
Santa Barbara,” said Hidetoshi Shibata, CEO of Renesas. “The
addition of Transphorm’s GaN technology builds on our momentum in
IGBT and SiC. It will fuel and expand our power portfolio as a key
pillar of growth, offering our customers the full ability to choose
their optimal power solutions.”
“Combined with Renesas’ world-wide footprint, breadth of
solution offerings and customer relationships, we are excited to
pave the way for industry-wide adoption of WBG materials and set
the stage for significant growth. This transaction will also allow
us to offer further expanded services to our customers and deliver
significant immediate cash value to our stockholders,” said Dr.
Primit Parikh, Co-founder, President and CEO of Transphorm and Dr.
Umesh Mishra, Co-founder and CTO of Transphorm. “Additionally, it
will provide a strong platform for our exceptional team to further
Transphorm’s leading GaN technology and products.”
Transaction Details
The board of directors of Transphorm has unanimously approved
the definitive agreement with respect to the transaction and
recommended that Transphorm stockholders adopt such definitive
agreement and approve the merger. Concurrently with the execution
of the definitive agreement, KKR Phorm Investors L.P., which holds
approximately 38.6% of Transphorm’s outstanding common stock, has
entered into a customary voting agreement with Renesas to vote in
favor of the transaction.
The transaction is expected to close in the second half of
calendar year 2024, subject to Transphorm stockholder approval,
required regulatory clearances and the satisfaction of other
customary closing conditions.
(Remarks) All names of products or services mentioned in this
press release are trademarks or registered trademarks of their
respective owners.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) empowers a safer,
smarter and more sustainable future where technology helps make our
lives easier. A leading global provider of microcontrollers,
Renesas combines our expertise in embedded processing, analog,
power and connectivity to deliver complete semiconductor solutions.
These Winning Combinations accelerate time to market for
automotive, industrial, infrastructure and IoT applications,
enabling billions of connected, intelligent devices that enhance
the way people work and live. Learn more at renesas.com. Follow us
on LinkedIn, Facebook, X, YouTube, and Instagram.
About Transphorm, Inc.
Transphorm, Inc., a global leader in the GaN revolution, designs
and manufactures high performance and high reliability GaN
semiconductors for high voltage power conversion applications.
Having a Power GaN IP portfolio of more than 1,000 owned or
licensed patents, Transphorm produces the industry’s first JEDEC
and AEC-Q101 qualified high voltage GaN semiconductor devices.
Transphorm’s vertically integrated device business model allows for
innovation at every development stage: design, fabrication, device,
and application support. Transphorm’s innovations move power
electronics beyond the limitations of silicon to achieve over 99%
efficiency, 50% more power density, and 20% lower system cost.
Transphorm is headquartered in Goleta, California and has
manufacturing operations in Goleta and Aizu, Japan. For more
information, please visit www.transphormusa.com. Follow us on X
@transphormusa and WeChat @ Transphorm GaN.
Advisors
Citi is serving as financial advisor to Renesas and Goodwin
Procter LLP and Covington & Burling LLP are serving as legal
counsel. BofA Securities, Inc. is serving as financial advisor to
Transphorm and Wilson Sonsini Goodrich & Rosati, Professional
Corporation is serving as legal counsel.
Additional Information and Where to Find It
Transphorm, Inc., its directors and certain executive officers
are participants in the solicitation of proxies from stockholders
in connection with the pending acquisition of Transphorm (the
“Transaction”). Transphorm plans to file a proxy statement (the
“Transaction Proxy Statement”) with the Securities and Exchange
Commission (the “SEC”) in connection with the solicitation of
proxies to approve the Transaction.
Primit Parikh, Julian Humphreys, Katharina McFarland, Umesh
Mishra, Cynthia (Cindi) Moreland, Kelly Smales, and Eiji Yatagawa,
all of whom are members of Transphorm’s Board of Directors, and
Cameron McAulay, Transphorm’s Chief Financial Officer, are
participants in Transphorm’s solicitation. The beneficial ownership
of each such person, as of the date specified, appears in the table
below. Additional information regarding such participants,
including their direct or indirect interests in the Transaction, by
security holdings or otherwise, will be included in the Transaction
Proxy Statement and other relevant documents to be filed with the
SEC in connection with the Transaction. The Transaction Proxy
Statement will also include information on any payments that may be
owed to Transphorm’s named executive officers in a change of
control of Transphorm.
Promptly after filing the definitive Transaction Proxy Statement
with the SEC, Transphorm will mail the definitive Transaction Proxy
Statement and a WHITE proxy card to each stockholder entitled to
vote at the special meeting to consider the Transaction.
STOCKHOLDERS ARE URGED TO READ THE TRANSACTION PROXY STATEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT TRANSPHORM WILL FILE WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Stockholders may obtain, free of charge, the preliminary and
definitive versions of the Transaction Proxy Statement, any
amendments or supplements thereto, and any other relevant documents
filed by Transphorm with the SEC in connection with the Transaction
at the SEC’s website (http://www.sec.gov). Copies of Transphorm’s
definitive Transaction Proxy Statement, any amendments or
supplements thereto, and any other relevant documents filed by
Transphorm with the SEC in connection with the Transaction will
also be available, free of charge, at the “Investors” section of
Transphorm’s website (https://ir.transphormusa.com/), or by writing
to Transphorm, Inc., Attention: Corporate Secretary, 75 Castilian
Drive, Goleta, CA 93117.
Beneficial Ownership as of
January 5, 2024
Individual
Shares Beneficially Owned
(#)
Primit Parikh
563,933
Julian Humphreys
103,524
Katharina McFarland
95,877
Umesh Mishra
610,626
Cynthia (Cindi) Moreland
72,197
Kelly Smales
75,099
Eiji Yatagawa
Nil
Cameron McAulay
223,754
The amounts specified above are determined in accordance with
the rules of the SEC and include securities that may be acquired
within 60 days of January 5, 2024. Mr. Yatagawa is a member of the
Board of Directors and serves as an executive of one or more
affiliates of Kohlberg Kravis Roberts & Co. L.P. (together with
its affiliates, “KKR”). KKR beneficially owns 24,724,468 shares of
Transphorm’s common stock (which includes warrants exercisable for
312,500 shares of Transphorm’s common stock); Mr. Yatagawa is not
deemed to beneficially own such shares.
Cautionary Note Regarding Forward-Looking Statements
This announcement may contain certain statements that are, or
may be deemed to be, “forward-looking statements” within the
meaning of the federal securities laws, including Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act and related to the financial condition, results of
operations and business of Renesas and/or Transphorm and/or the
combined group following completion of the Transaction and certain
plans and objectives of Renesas with respect thereto. These
forward-looking statements can be identified by the fact that they
do not relate to historical or current facts. Forward-looking
statements also often use words such as ‘anticipate’, ‘target’,
‘continue’, ‘estimate’, ‘expect’, ‘‘forecast’, ‘intend’, ‘may’,
‘plan’, ‘goal’, ‘believe’, ‘hope’, ‘aims’, ‘continue’, ‘could’,
‘project’, ‘should’, ‘will’ or other words of similar meaning.
These statements are based on assumptions and assessments made by
Renesas and/or Transphorm (as applicable) in light of their
experience and perception of historical trends, current conditions,
future developments and other factors they believe appropriate. By
their nature, forward-looking statements involve risk and
uncertainty, because they relate to events and depend on
circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this
announcement could cause actual results and developments to differ
materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to be correct and you are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this announcement.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. There
can be no assurance that the Transaction will in fact be
consummated Many factors could cause actual results to differ
materially from those projected or implied in any forward-looking
statements. Important risk factors that may cause such a difference
include, but are not limited to: (i) the completion of the
Transaction on anticipated terms and timing, including obtaining
shareholder and regulatory approvals, anticipated tax treatment,
unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and
management strategies for the management, expansion and growth of
Transphorm’s business and other conditions to the completion of the
Transaction; (ii) the impact of the COVID-19 pandemic on the
business of Transphorm or Renesas; (iii) the ability of Transphorm,
Renesas or the combined company to implement its business strategy;
(iv) significant transaction costs associated with the Transaction;
(v) potential litigation relating to the Transaction; (vi) the risk
that disruptions from the Transaction will harm Transphorm’s or
Renesas’ business, including current plans and operations; (vii)
the ability of Transphorm or Renesas to retain and hire key
personnel; (viii) potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the Transaction; (ix) legislative, regulatory and
economic developments affecting the business of Transphorm or
Renesas; (x) general economic and market developments and
conditions; (xi) the evolving legal, regulatory and tax regimes
under which Transphorm or Renesas operates; (xii) potential
business uncertainty, including changes to existing business
relationships, during the pendency of the merger that could affect
the financial performance or Transphorm or Renesas; (xiii)
restrictions during the pendency of the Transaction that may impact
Transphorm’s ability to pursue certain business opportunities or
strategic transactions; (xiv) unpredictability and severity of
catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as
Transphorm’s or Renesas’ response to any of the aforementioned
factors; (xv) the possibility that the conditions to the closing of
the Transaction are not satisfied, including the risk that required
approvals from Transphorm’s stockholders for the Transaction or
required regulatory approvals to consummate the Transaction are not
obtained, on a timely basis or at all; (xvi) the occurrence of any
event, change or other circumstances that could give rise to the
right to terminate the Transaction, including in circumstances
requiring Transphorm to pay a termination fee; (xvii) uncertainties
as to the timing of the consummation of the Transaction; (xviii)
possible disruption related to the Transaction to Transphorm’s
current plans and operations, including through the loss of
customers and employees; (xix) the risk that Transphorm’s stock
price may fluctuate during the pendency of the Transaction and may
decline if the Transaction is not completed; (xx) the anticipated
benefits of the Transaction and considerations taken into account
by Transphorm’s Board of Directors in approving the Transaction;
(xxi) the risk that Transphorm may not obtain sufficient short-term
financing to fund Transphorm’s operations through the closing of
the Transaction; and (xxii) other risks and uncertainties detailed
in the periodic reports that Transphorm files with the SEC,
including Transphorm’s Annual Report on Form 10-K filed with the
SEC on June 28, 2023, and Transphorm’s Quarterly Report on Form
10-Q filed with the SEC on November 13, 2023. These risks, as well
as other risks associated with the Transaction, are more fully
discussed in the Proxy Statement to be filed with the SEC in
connection with the Transaction. Due to such uncertainties and
risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date of this
announcement. Neither Renesas nor Transphorm undertake any
obligation to update or revise any forward-looking statement as a
result of new information, future events or otherwise, except as
required by applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or dispositions. If any
one or more of these risks or uncertainties materializes or if any
one or more of the assumptions prove incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward looking statements should therefore be construed in the
light of such factors.
No member of the Renesas group or the Transphorm group nor any
of their respective associates, directors, officers, employers or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur.
Except as expressly provided in this announcement, no
forward-looking or other statements have been reviewed by the
auditors of the Renesas group or the Transphorm group. All
subsequent oral or written forward-looking statements attributable
to any member of the Renesas group or the Transphorm group, or any
of their respective associates, directors, officers, employers or
advisers, are expressly qualified in their entirety by the
cautionary statement above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240110228822/en/
Media Contacts: Renesas Electronics Corporation Isamu
Yamada +81 3-6773-3001 pr@renesas.com
Transphorm, Inc. David Hanover transphorm@kcsa.com
Investor Relations Contacts: Renesas Electronics
Corporation Yuma Nakanishi +81 3-6773-3002 ir@renesas.com
Transphorm, Inc. Cameron McAulay cmcaulay@transphormusa.com
Transphorm (NASDAQ:TGAN)
Historical Stock Chart
From Apr 2024 to May 2024
Transphorm (NASDAQ:TGAN)
Historical Stock Chart
From May 2023 to May 2024