LED chipmaker Lextar Electronics Corp (隆達電子) yesterday announced a NT$2.1 billion (US$70.7 million) share-swap deal to acquire a smaller domestic peer, Wellypower Optronics Corp (威力盟), to expand its scale and integrate its resources.
Based on the agreement, Lextar shareholders would get two shares of Wellypower for each Lextar share. That meant Lextar offered NT$15.33 per share for Wellypower, a slight premium to Wellypower’s closing price of NT$15.10 yesterday.
“Lextar and Wellypower are partners in the LED supply chain and business,” Lextar chief financial executive Chang Bo-yi (張博儀) told a media briefing.
Wellypower provides LED chip packaging services and LED lighting for small brands, as well as makes LED backlighting for notebook computer screens, Chang said.
Lextar makes LED chips, provides LED lighting for big global brands and makes LED lighting for major global lighting brands, he said.
The deal will expand Lextar’s LED chip packaging capacity by 20 percent to 1 billion units from 800 million units a month, Chang said.
It is scheduled to close in February next year. AU Optronics Corp (友達光電), the nation’s second-biggest LCD panel maker, holds a 50 percent stake in Lextar and a 9 percent share of Wellypower. Local lighting brand China Electric Mfg Corp (中國電器) owns a 21 percent stake in Wellypower.
The company will not cut any jobs after the merger, Chang said. The two firms have a total of 5,000 employees.
Lextar eked out a profit of NT$126 million, or NT$0.3 per share, on revenue of NT$2.61 billion in the first quarter of the year.
Wellypower posted a loss on NT$134 million on revenue of NT$2.07 billion during the same period.