By Renée Francoeur
July 15, 2016 – Cree is selling its Wolfspeed Power and RF division—which includes the silicon carbide substrate business for power, RF and gemstone applications—to Infineon Technologies AG for $850 million in cash.
“Selling Wolfspeed to Infineon speeds our transition to a more focused LED lighting company while providing significant resources to accelerate our growth,” said Chuck Swoboda, Cree chairman and CEO. “Divesting Wolfspeed is targeted to reduce short-term profits, but increase free cash flow. We target using the capital raised, combined with improved free cash flow, to fund select M&A, as well as to support additional stock buybacks.”
The business to be acquired by Infineon generated pro-forma revenue of $173 million in the last twelve months ending March 27, 2016, according to Cree.
The closing of the transaction is expected by the end of 2016.