Kopin Inks Pact to Sell III-V Assets to IQE plc for $75 Million [Professional Services Close - Up]
(Professional Services Close - Up Via Acquire Media NewsEdge) Kopin Corp. announced that it had entered into an agreement to sell its III-V assets to IQE plc, a UK-based designer and supplier of advanced semiconductor wafers.
According to the company, the all-cash, $75 million transaction will enable Kopin to focus exclusively on continued commercial development of Golden-i, the Company's mobile communications technology platform, as well as on its microdisplay products. The closing of the transaction is expected to occur next week and is subject to customary closing conditions.
Kopin began producing III-V HBTs (heterojunction bipolar transistors) on gallium arsenide substrates in 1996. These products are part of advanced integrated circuits that are used in smartphones and other mobile communications devices. The Company's III-V revenues through the first nine months of 2012 were approximately $44 million.
"Over the past 17 years, our III-V technology has contributed significantly to the operational success of Kopin and to advances in the wireless handset market," said Dr. John C.C. Fan, the Company's President and Chief Executive Officer. "However, while the III-V product line is successful we have made the strategic decision to focus on our Golden-i technology which we believe has great potential. Accordingly, the board of directors believes that shareholders will be more effectively served by having the Company focusing its resources on expanding the commercial development of Golden-i and our display product line."
Under the terms of the sale, Kopin will receive an up-front payment of $60 million, subject to certain working capital adjustments, from IQE and will receive the remaining $15 million in January 2016 on the three-year anniversary of the transaction. The transaction includes Kopin's leased III-V product manufacturing facility in Taunton, Massachusetts as well as the Company's investment in Kopin Taiwan Corp. (KTC), its 90 percent owned subsidiary located in Hsinchu, Taiwan.
In October 2012, Kopin achieved a milestone in its development of Golden-i technology. Motorola Solutions launched the HC1, a commercially available headset computer powered by the Company's Golden-i 3.5 reference model. Motorola's product is a ruggedized version designed primarily for heavy industrial settings.
Now Kopin is teaming with its OEM partners on the development of a Golden-i platform for the light industrial and professional markets. This week, Kopin unveiled Golden-i 3.8, a smaller and more reference design aimed at those markets as well as other users. The new device was unveiled at the Verizon booth at the 2013 Consumer Electronics Show in Las Vegas. The operating system has 16 times the processing power of the previous version. New features include a low light, inertial stabilized high-resolution camera to provide real- time video streams and an accessory infrared camera that provides emergency personnel and first responders with night vision and thermal vision capabilities.
"Our plan is to continue to invest in the businesses and technologies that enable Kopin to capitalize on the significant market for Golden-i," Dr. Fan said. "The divestiture of our III-V product line provides us with the additional financial resources and flexibility to pursue the strategic growth objectives for Golden-i that ultimately will drive value for our shareholders."
Dr. Drew Nelson, President and CEO of IQE, said, "Kopin's HBT business is an ideal strategic fit for IQE, broadening our customer base and enhancing our product portfolio. This transaction further strengthens our ability to provide our customers with cost, technology and security of supply advantages, building on our 21- year history of technology leadership and manufacturing excellence."
Kopin Corp. is developing Golden-i, a proprietary voice- activated, cloud computing, wireless, hands-free technology with microdisplay capabilities for use in headset computers.
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