Cree to focus on power business, sells lighting

March 19, 2019 // By Julien Happich
Cree to focus on power business, sells lighting
Cree is to sell its Lighting Products business unit to focus on its Wolfspeed silicon carbide power activities.

The agreement continues Cree’s strategy, announced in February 2018, to create a more focused, powerhouse semiconductor company, providing growth capital for Wolfspeed, its core Power and RF business, and equips Cree with additional resources to expand its semiconductor operations.

Cree Lighting includes the LED lighting fixtures, lamps and corporate lighting solutions business for commercial, industrial and consumer applications an dis being sold to Ideal Industries. Idea also acquired the rights to use and operate under the Cree Lighting brand, which will become a separate operating division of the company and will continue to be led by current management.

Cree expects to receive an initial cash payment of $225 million, subject to purchase price adjustments, and has the potential to receive a targeted earn-out payment of approximately $85 million based on an adjusted EBITDA metric for Cree Lighting over a 12-month period beginning two years after the transaction closes. The transaction is expected to close within the second quarter of 2019.

The deal also enables Cree Lighting to gain additional global focus, channel support and investment as it becomes a growth engine for the Idea team.

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