Renesas Electronics Corporation (a premier supplier of advanced semiconductor solutions) and Transphorm (a global leader in robust gallium nitride -or GaN- power semiconductors) recently 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 year and a premium of approximately 78% to the volume weighted average price over the last six months.
The deal values Transphorm at approximately $339 million. And 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.
The demand for highly efficient power systems is increasing as building blocks for carbon neutrality. And to address this trend, an industry-wide transition toward wide bandgap (WBG) materials, represented by silicon carbide (SiC) and GaN, is also being seen. Thee advanced materials allow a broader range of voltage and switching frequency than conventional silicon-based devices. And to build on this momentum, Renesas announced the establishment of an in-house SiC production line, supported by a 10 year SiC wafer supply agreement.
Renesas 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. And these benefits empower customers’ systems with greater efficiency, smaller and lighter composition, and lower overall cost. So the 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.
Deal Details
The board of directors of Transphorm 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 deal 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.
KEY QUOTES:
“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. 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.”
— Hidetoshi Shibata, CEO of Renesas
“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. Additionally, it will provide a strong platform for our exceptional team to further Transphorm’s leading GaN technology and products.”
— Dr. Primit Parikh, Co-founder, President and CEO of Transphorm and Dr. Umesh Mishra, Co-founder and CTO of Transphorm
