Kopin sells assets to IQE Plc. for $75M

KOPIN CORP. has agreed to sell its III-V assets to U.K.-based IQE Plc. in order to focus on its mobile communications technology platform Golden-i and its microdisplay products.
Posted 1/10/13

(Updated, 1:15 p.m.)

TAUNTON – The Kopin Corp. has announced an agreement to sell assets relating to its III-V heterojunction bipolar transistors to IQE PLC, a leading U.K. designer and supplier of advanced semiconductor wafers, for $75 million.

The agreement includes Kopin’s leased III-V product manufacturing facility in Taunton as well as the company’s investment in Kopin Taiwan Corp, its 90 percent owned subsidiary located in Hsinchu, Taiwan.

Richard Sneider, Kopin’s treasurer and chief financial officer, told Providence Business News that there will be no reductions in employment at the Taunton plant, and that he believed IQE was planning on expanding the facility.

As of Dec. 5, 2012, Kopin had 150 employees in the Rhode Island, Bristol County, Mass. area.

The $75 million, all-cash transaction will enable Kopin to focus exclusively on the continued commercial development its mobile communications technology platform Golden-i, as well its microdisplay products.

“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,” John C.C. Fan, the president and CEO of Kopin, said in a statement. “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.

“Our plan is to continue to invest in the businesses and technologies that enable Kopin to capitalize on the significant market for Golden-i,” Fan said in a statement. “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.”

Kopin began producing the III-V HBTs in 1996. The products are part of advanced integrated circuits, which are used in smartphones and other mobile communications devices. According to a release, Kopin’s III-V revenue for the first nine months of 2012 was roughly $44 million.

Under the terms of the sale, Kopin will receive an up-front payment of $60 million, which will be subject to certain working capital adjustments, and will receive the remaining $15 million in January 2016 on the three-year anniversary of the transaction.

“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,” Drew Nelson, president and CEO of IQE, said in a statement.

The Kopin, IQE deal is expected to close next week and is subject to customary closing conditions.

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