Renesas Electronics Corporation, a leading provider of advanced semiconductor solutions, and Transphorm, Inc., a global leader in robust gallium nitride ("GaN") power semiconductors, have officially entered into a definitive agreement. Under this agreement, a subsidiary of Renesas will acquire all outstanding shares of Transphorm’s common stock for $5.10 per share in cash. This offer represents a premium of approximately 35% to Transphorm’s closing price on January 10, 2024, approximately 56% to the volume weighted average price over the last twelve months, and roughly 78% to the volume weighted average price over the last six months. The total transaction values Transphorm at approximately $339 million.
This strategic acquisition will provide Renesas with in-house GaN technology, a crucial next-generation material for power semiconductors. It will also broaden Renesas' reach into rapidly growing markets such as electric vehicles, computing (including data centers and AI infrastructure), renewable energy, industrial power conversion, and fast chargers/adapters.
The demand for highly efficient power systems is rising as fundamental components for achieving carbon neutrality. In response to this trend, the industry is undergoing a shift towards wide bandgap (WBG) materials, including silicon carbide (SiC) and GaN. These advanced materials enable a wider range of voltage and switching frequency compared to traditional silicon-based devices. Renesas has also announced the establishment of an in-house SiC production line, supported by a 10-year SiC wafer supply agreement, to capitalize on this industry momentum.
Moving forward, Renesas aims to expand its WBG portfolio with Transphorm’s expertise in GaN. GaN, an emerging material, enables higher switching frequency, lower power losses, and smaller form factors. The benefits of GaN empower customers’ systems with increased efficiency, smaller and lighter composition, and reduced overall cost. Industry forecasts predict a growth of over 50 percent annually for GaN demand. Renesas plans to leverage Transphorm’s auto-qualified GaN technology to develop new enhanced power solution offerings, such as X-in-1 powertrain solutions for electric vehicles, as well as computing, energy, industrial, and consumer applications.
Hidetoshi Shibata, CEO of Renesas, highlighted the unique leadership of Transphorm in GaN power and its roots at the University of California at Santa Barbara. He emphasized that the addition of Transphorm’s GaN technology builds on Renesas’ momentum in IGBT and SiC, positioning it as a key pillar of growth, providing customers with a full range of power solutions.
Dr. Primit Parikh, Co-founder, President and CEO of Transphorm, and Dr. Umesh Mishra, Co-founder and CTO of Transphorm, expressed enthusiasm about the transaction, anticipating industry-wide adoption of WBG materials and significant growth. The acquisition is also expected to provide expanded services to customers and deliver immediate cash value to Transphorm stockholders. It will create opportunities for Transphorm's team to further develop its leading GaN technology and products.
The board of directors of Transphorm unanimously approved the definitive agreement, recommending that Transphorm stockholders adopt the agreement and approve the merger. KKR Phorm Investors L.P., holding approximately 38.6% of Transphorm’s outstanding common stock, has entered into a customary voting agreement with Renesas to vote in favor of the transaction.
The transaction is projected to close in the second half of calendar year 2024, subject to Transphorm stockholder approval, required regulatory clearances, and the satisfaction of other customary closing conditions.
