IQE Iqe Plc

 
TIDMIQE 
 
 
   IQE plc 
 
   ("IQE", the "Company" or the "Group") 
 
   Acquisition of 100% of CSDC Private Limited ("CSDC") 
 
   Cardiff, UK 10 October 2019: IQE plc (AIM: IQE) the leading supplier of 
advanced wafer products and material solutions to the semiconductor 
industry, announces the acquisition of third-party shareholdings in its 
CSDC joint venture in Singapore taking its ownership to 100%. 
 
   CSDC was formed in March 2015 as a joint venture between IQE's 
Singaporean subsidiary MBE Technology Pte Limited (51%), WIN 
Semiconductors Corp (25%), Nanyang Technological University (18%) and 
individuals of the NanYang University (6%). It was established as a 
vehicle for the development and commercialisation of compound 
semiconductor technologies for academic and industrial customers based 
on Molecular Beam Epitaxy (MBE) technologies in Asia. 
 
   Since formation, the geo-political landscape has changed significantly. 
During 2019 in particular, the localisation of Asian technology supply 
chains is rapidly becoming evident and significant opportunities are 
emerging for the China 5G market. 
 
   By taking the operation under 100% ownership, IQE is best placed to 
 
 
   1. Take the necessary steps to restructure the operation which is currently 
      loss-making as a result of under-utilisation of assets and property lease 
      obligations; and 
 
   2. Pursue Asian market sales opportunities for MBE-based products to return 
      the operation to profitability. 
 
 
   Revenue recognised by IQE and its Singaporean subsidiary will be 
unaffected by the transaction. It is anticipated that post acquisition 
adjusted EBITDA and adjusted Operating Profit in the consolidated group 
accounts for FY19 will be adversely affected by c.GBP0.5m. 
 
   The acquisition is for a nominal fee of USD$1 to WIN Semiconductors Corp 
and SGD$1 to each of the other third party shareholders, to be settled 
in cash. The non-cash balance sheet impacts will be finalised as part of 
the completion of acquisition accounting for the shareholdings. 
 
   For the year ended 31 December 2018, CSDC recorded net losses of 
SGD$8.9m. The net liabilities attributable to CSDC as at 31 December 
2018 were SGD$15.4m. 
 
   Drew Nelson will remain as a Director of CSDC and LG Yeap, General 
Manager for MBE Technology Pte Limited, will become a Director of CSDC. 
 
   The acquisition constitutes a related party transaction under AIM Rule 
13 by virtue of WIN Semiconductors Corp and Nanyang Technological 
University being substantial shareholders in CSDC hence they are related 
parties under the AIM Rules. 
 
   The directors of the Company, having consulted with Peel Hunt LLP in its 
capacity as the Company's nominated adviser for the purposes of the AIM 
Rules, consider the terms of the transaction to be fair and reasonable 
insofar as the Company's shareholders are concerned. 
 
   Dr Drew Nelson, Chief Executive Officer of IQE, said: 
 
   "In the current geopolitical context, Singapore represents a 
strategically significant site for IQE. The capabilities of the CSDC 
team and skills availability in that location, coupled with proximity to 
Asian chip customers and OEMs, provide a strong opportunity to 
contribute to IQE's global growth opportunities. With 100% control, IQE 
will be best positioned to address the current financial position and 
secure the strategic direction of the operation." 
 
   CONTACTS: 
 
   IQE plc 
 
   +44 (0) 29 2083 9400 
 
   Drew Nelson 
 
   Tim Pullen 
 
 
 
   Peel Hunt LLP (Nomad and Joint Broker) 
 
   +44 (0) 20 7418 8900 
 
   Edward Knight 
 
   Nick Prowting 
 
   Christopher Golden 
 
 
 
   Citigroup Global Markets Limited (Joint Broker) 
 
   +44 (0) 20 7986 4000 
 
   Christopher Wren 
 
   Peter Catterall 
 
   Headland Consultancy (Financial PR) 
 
   + 44 (0) 20 3805 4822 
 
   Andy Rivett-Carnac: +44 (0) 79 6899 7365 
 
   Tom James: +44 (0) 78 1859 4991 
 
   ABOUT IQE 
 
   http://iqep.com 
 
   IQE is the leading global supplier of advanced compound semiconductor 
wafers that enable a diverse range of applications across: 
 
 
   -- handset devices 
 
   -- global telecoms infrastructure 
 
   -- connected devices 
 
   -- 3D sensing 
 
 
   The macro trends of 5G and connected devices are expected to drive 
significant growth for compound semiconductors over the coming years. 
 
   As a scaled global epitaxy wafer manufacturer, IQE is uniquely 
positioned in this market which has high barriers to entry. IQE supplies 
the whole market and is agnostic to the winners and losers at chip and 
OEM level. By leveraging the Group's intellectual property portfolio 
including know-how and patents, it produces epitaxy wafers of superior 
quality, yield and unit economics. 
 
   IQE is headquartered in Cardiff UK, and Is listed on the AIM stock 
Exchange in London. 
 
 
 
 
 
 

(END) Dow Jones Newswires

October 10, 2019 02:00 ET (06:00 GMT)

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