All About Sunedison Semiconductor Ltd (NASDAQ:SEMI)’s $683 Million Buyout


Sunedison Semiconductor Ltd (NASDAQ: SEMI) is selling itself to GlobalWafers of Taiwan. The buyout deal comes several months after officials of SEMI revealed that they were exploring strategic alternatives for the business. An unsolicited offer to buy SEMI triggered the strategic review that has now resulted in a deal to sell the company in entirety.

What’s on the table?

GlobalWafers has offered to acquire Sunedison Semiconductor Ltd (NASDAQ: SEMI) at a price of $12 per share, which represents a premium of 78.6% over the stock’s average closing price for 30 trading days preceding the announcement of the deal. The offer also represents a 45% premium over the stock’s closing price on the day immediately before the deal was made public.

Assumption of debt

Because GlobalWafers is swallowing SEMI’s debt as part of the buyout agreement, the total value of the deal stands at $638 million.

How far with the talks?

The boards of Sunedison Semiconductor Ltd (NASDAQ: SEMI) and GlobalWafers have already approved the transaction. However, regulators and shareholders of SEMI will have to weigh in on the transaction because it can close.

SEMI’s CEO, Shaker Sadasivam said they were looking forward to a smooth closure of the deal and predicted that closing of the transaction could happen before the end of this year.

At is worth pointing out at this juncture that GlobalWafers owns 4.9% equity stake in SEMI and that gives it some head start in closing the deal.

Shares of SEMI rose nearly 40% in the last session after the buyout news reached the market, a sign that investors favor the transaction.

How SEMI came into being

Sunedison Semiconductor Ltd (NASDAQ: SEMI) was originally a unit of the bankrupt renewable energy firm Sunedison Inc (OTCMKTS: SUNEQ). However, it was separated from the parent in May 2014 through an IPO. Though SUNEQ retained a holding in SEMI, it sold that stake in SEMI last year.

How Sunedison Semiconductor Ltd (NASDAQ: SEMI) fared in 2Q2016

Sunedison Semiconductor Ltd (NASDAQ: SEMI) failed to impress in 2Q2016 as its EPS loss of $0.80 was wider than EPS loss of $0.50 that analysts expected. Other than that, revenue fell 8% YoY to $190.9 million.


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