Transphorm Inc of Goleta, CA, USA is to be acquired by a subsidiary of Renesas Electronics Corp of Tokyo, Japan for $5.10 per share in cash (a premium of about 35% to Transphorm’s closing stock price on 10 January, and about 56% to the volume-weighted average price over the last 12 months and 78% to that over the last six months). The transaction values Transphorm at about $339m.
Spun off from University of California at Santa Barbara (UCSB) in 2007, Transphorm designs JEDEC- and AEC-Q101-qualified gallium nitride (GaN) field-effect transistors (FETs) for high-voltage power conversion, and has manufacturing operations in Goleta and in Aizu, Japan.
The acquisition will provide Renesas with in-house GaN technology, expanding its reach into fast-growing power semiconductor markets such as electric vehicles (EVs), computing (data centers, AI, infrastructure), renewable energy, industrial power conversion and fast chargers/adapters.
To address the industry-wide transition toward wide-bandgap (WBG) materials due to them allowing a broader range of voltage and switching frequency than conventional silicon-based devices, Renesas has already announced the establishment of an in-house silicon carbide (SiC) production line, supported by a 10 year SiC wafer supply agreement.
Renesas now aims to further expand its WBG portfolio with Transphorm’s expertise in GaN, since it enables higher switching frequency, lower power losses, and smaller form factors. These benefits allow systems with greater efficiency, smaller and lighter composition, and lower overall cost. Demand for GaN is hence predicted to grow by more than 50% annually, according to an industry study. Renesas aims to implement Transphorm’s automotive-qualified GaN technology to develop new enhanced power solutions, such as X-in-1 powertrain solutions for EVs, along with computing, energy, industrial and consumer applications.
“Transphorm is a company uniquely led by a seasoned team rooted in GaN power and with origins from the University of California at Santa Barbara,” notes Renesas’ CEO Hidetoshi Shibata. “The addition of Transphorm’s GaN technology builds on our momentum in [silicon-based] IGBT and SiC. It will fuel and expand our power portfolio as a key pillar of growth, offering our customers the full ability to choose their optimal power solutions,” he adds.
Picture: Transphorm’s CEO Dr Primit Parikh and Renesas’ CEO Hidetoshi Shibata.
“Combined with Renesas’ world-wide footprint, breadth of solution offerings and customer relationships, we are excited to pave the way for industry-wide adoption of WBG materials and set the stage for significant growth,” say Transphorm’s co-founder, president & CEO Dr Primit Parikh and co-founder & chief technology officer Dr Umesh Mishra. “This transaction will also allow us to offer further expanded services to our customers and deliver significant immediate cash value to our stockholders. Additionally, it will provide a strong platform for our exceptional team to further Transphorm’s leading GaN technology and products,” they add.
Transphorm’s board of directors has unanimously approved the acquisition and recommended that stockholders adopt the definitive agreement and approve the merger. Concurrently with the execution of the definitive agreement, KKR Phorm Investors L.P., which holds about 38.6% of Transphorm’s outstanding common stock, has entered into a customary voting agreement with Renesas to vote in favor of the transaction.
The deal is expected to close in second-half 2024, subject to Transphorm stockholder approval, required regulatory clearances and the satisfaction of other customary closing conditions.