SMART Global Holdings’ US$300 Million Acquisition Of Cree LED

O’Melveny & Myers LLP advised SMART Global Holdings on the deal.

SMART Global Holdings (NASDAQ: SGH) announced its entry into a definitive agreement to acquire the LED Products business unit of Cree, Inc. (Nasdaq: CREE), known as “Cree LED,” for up to US$300 million.

SMART is a global leader in specialty solutions serving the electronics industry for over 30 years across the memory, computing, and storage markets. Cree LED comprises a broad portfolio of highly efficient LED chips and high-performance LED components and represents one of the strongest global brands in the LED business. Leveraging SMART’s comprehensive global platform and proven operational excellence, Cree LED will be well positioned to continue to deliver industry-leading LED products and solutions.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, SMART will make an initial cash payment of US$50 million upon closing and an additional US$125 million in a seller-financed note payable interest only until a balloon payment due in August 2023. Cree has the potential to receive an earn-out payment of up to US$125 million based on the revenue and gross profit performance of Cree LED in the first full four quarters post-transaction close, payable in the form of a three-year seller note.

The SMART lines of business are leading designers and manufacturers of electronic products focused on memory and computing technology areas. SMART Global Holdings specializes in application-specific product development and support for customers in enterprise, government and OEM sales channels. The company targets customers in markets such as communications, storage, networking, mobile, industrial automation, industrial internet of things, government, military, edge computing and high performance computing.

Cree is an innovator of Wolfspeed® power and radio frequency (RF) semiconductors and lighting class LEDs. Cree’s Wolfspeed product families include silicon carbide materials, power-switching devices and RF devices targeted for applications such as electric vehicles, fast charging inverters, power supplies, telecom and military and aerospace. Cree’s LED product families include blue and green LED chips, high-brightness LEDs and lighting-class power LEDs targeted for indoor and outdoor lighting, video displays, transportation and specialty lighting applications.

The O’Melveny team representing SMART was led by partners Warren Lazarow (Picture), Andor Terner, and Nikole Kingston and included Carl Heiberg, Andy Dolak, Tom Oslovar, Jeff Walbridge, Eric Amdursky, Aaron Cha, Courtney Dyer, Philip Monaghan, Walker Wallace, Bob Fisher, Brett Williamson, Brian Kenyon, David Ribner, Scott Pink, Cem Surmeli and Ben Callahan.

Involved fees earner: Eric Amdursky – O’Melveny & Myers LLP; Ben Callahan – O’Melveny & Myers LLP; Aaron Cha – O’Melveny & Myers LLP; Andrew Dolak – O’Melveny & Myers LLP; Courtney Dyer – O’Melveny & Myers LLP; Robert Fisher – O’Melveny & Myers LLP; Carl Erik Heiberg – O’Melveny & Myers LLP; Brian Kenyon – O’Melveny & Myers LLP; Nikole Kingston – O’Melveny & Myers LLP; Warren Lazarow – O’Melveny & Myers LLP; Philip Monaghan – O’Melveny & Myers LLP; Tom Oslovar – O’Melveny & Myers LLP; Scott Pink – O’Melveny & Myers LLP; David Ribner – O’Melveny & Myers LLP; Onur Surmeli – O’Melveny & Myers LLP; Andor Terner – O’Melveny & Myers LLP; Jeff Walbridge – O’Melveny & Myers LLP; Walker Wallace – O’Melveny & Myers LLP; Brett Williamson – O’Melveny & Myers LLP;

Law Firms: O’Melveny & Myers LLP;

Clients: SMART Global Holdings, Inc.;

Author: Ambrogio Visconti