Diodes Inc., Lite-On Semiconductor agree to merge in cash deal

Diodes purchases Lite-On
Diodes Inc. has agreed to purchase Lite-On Semiconductor Corp., a supplier of "green" power-related discrete and analog semiconductor devices (Lite-On).

Seeking to broaden its product line, Diodes Inc., a supplier of application-specific semiconductors, has agreed to purchase Lite-On Semiconductor Corp., a Taiwan-based supplier of “green” power-related discrete and analog semiconductor devices. The deal is a cash-based swap transaction valued at $428 million.

The deal is expected to be a major step in helping Diodes execute its strategic growth plan of reaching $2.5 billion in revenue by 2025. Diodes will broaden its discrete and bipolar IC product offerings in Asia, leveraging its extensive global sales network. In addition, Diodes is expected to benefit from Lite-On’s wafer fabs and assembly sites in the Far East, through the addition of manufacturing capacity and flexibility.

Keh-Shew Lu, president and chief executive of Diodes, said in a statement, “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. 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.”

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At the effective date of the transaction, each share of LSC stock will be converted into the right to receive TWD 42.50 in cash, or $1.37 USD, as of June 30, 2019 without interest. The aggregate consideration will be approximately $428 million. The price per share reflects a premium of 35% over LSC’s 30-day volume-weighted average price (VWAP). Diodes expects to fund the purchase price of the acquisition primarily with proceeds from a new financing arrangement co-led by Bank of America, PNC Bank and Wells Fargo Securities. 

In its second fiscal quarter ended June 30, Diodes earned $322.0 million, up 5.9% from $304.1 million in the second quarter of 2018 and up 6.5% from $302.3 million in the first quarter of 2019.

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