OREANDA-NEWS. GlobalWafers and Topsil Semiconductor Materials A/S have today signed an agreement pursuant to which GlobalWafers will acquire Topsil’s entire silicon business at a price of DKK 320 million on a debt-free basis before transaction costs.

Topsil has been working with GlobalWafers for many years. In 2000, Topsil outsourced its Danish wafer production to GlobalWafers, which has since been a wafer processing supplier to Topsil.

The agreement is the result of a structured sales process involving a broad range of prospective industrial buyers and private equity funds. The process was initiated by, among other things, a request by the shareholders attending the 2015 AGM that all strategic possibilities be investigated in connection with the preparation of the revised strategy.

The agreement is subject to regulatory approval and approval of the transaction by the shareholders of Topsil at an extraordinary general meeting. The transaction is expected to be completed in early July 2016 when the conditions have been satisfied.

Topsil’s Board of Directors recommend that the Company’s shareholders approve the sale of the silicon business considering the attractive value of the transaction and because the transaction is in the interest of shareholders, employees and other stakeholders.

The Board of Directors believes that if a divestment of the silicon business is not completed, the Company will require a significant capital contribution in order to achieve its strategy and create additional value for the shareholders. 

HIGHLIGHTS OF THE TRANSACTION

  • All assets and liabilities relating to the silicon business at 1 January 2016, including the Polish operating company and the Japanese sales company, will be hived off into a new company.
  • GlobalWafers Co. Ltd. will acquire the shares of the new company effective as from 1 January 2016. Topsil has issued guarantees and representations which are customary for this type of transaction. 
  • The Board of Directors and the Management Board will not be part of the transaction and will remain with the listed company.

 On completion of the transaction and repayment of its bank debt, payment of transaction costs and management changes, the listed company is expected to have at its disposal net liquidity of approximately DKK 110 million, equal to DKK 0.21 per share. The Board of Directors recommends that most of these cash funds be distributed to the company’s shareholders in the third quarter of 2016.  

Other assets of the listed company will mainly consist of the property company in Poland, which was recognised at a net booked value of DKK 60.6 million at 31 December 2015.

The combined net value of just over DKK 170 million represents a premium

  • of 36% relative to the closing price at 19 April 2016 of DKK 0.235 per share, immediately prior to the announcement of the potential indication of interest in Topsil’s silicon business, and
  • of 12% relative to the closing price of DKK 0.285 per share at 19 May 2016. 

The selling price corresponds to 14x the 2015 EBITDA of the silicon business. 

The purchase price cannot yet be finally determined, being subject to specific factors, including the outcome of a patent dispute, a calculation of the value of Topsil’s inventories, and the revenue of Topsil’s silicon business for the six months ending 30 June 2016. In a worst case assumption, this is believed to involve a possible reduction of the purchase price in the order of 10%.