Cree Sells Lighting Business to Focus on Wolfspeed
Not surprisingly, Cree is selling its lighting business, enabling it to focus on Wolfspeed’s opportunities for SiC and GaN semiconductors and better meet Wall Street’s financial expectations. Ideal Industries, based in Sycamore, Illinois, will pay some $310 million for the business, which was once the focus of Cree’s technology.
“Cree has made significant progress over the last 18 months in sharpening the focus of our business to become a semiconductor powerhouse in SiC and GaN technologies. Over that time frame, we have grown Wolfspeed by more than 100 percent, acquired the Infineon RF business, more than doubled our manufacturing capacity of SiC materials and signed multiple longterm supply agreements, which, in aggregate, are in excess of $500 million. With the addition of today’s lighting divestiture news, Cree is well positioned as a more focused semiconductor leader. This transaction provides significant resources to help accelerate Wolfspeed’s growth while providing a terrific growth opportunity for the lighting business and its employees through an expanded channel that strengthens its market position.” — Gregg Lowe, CEO of Cree
The sale will include Cree’s LED lighting fixtures, lamps and corporate lighting solutions for commercial, industrial and consumer applications. The deal requires regulatory approvals and is expected to close by the end of June.
The $310 million purchase price comprises an initial payment of some $225 million, with the potential for an earn-out payment of $85 million if the lighting business achieves a target adjusted EBITDA over a 12-month period.
Ideal is a 103-year-old, fourth-generation, family business providing electric power control and management globally. The company sees Cree lighting’s segment as complementary to Ideal’s control business, customers and sales channel.
Perhaps it’s time to change Cree’s name to Wolfspeed.