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Cree to Buy Chinese LED Maker for $200M
Monday March 12, 7:43 am ET
Cree to Buy Chinese LED Maker Cotco for $200 Million in Cash and Stock

http://biz.yahoo.com/ap/070312/cree_acquisition.html?.v=1

DURHAM, N.C. (AP) -- Cree Inc., which makes semiconductor materials and electronic devices made from silicon carbide, said Monday it agreed to buy privately held Cotco Luminant Device Ltd. for $200 million in cash and stock.

Cotco, based in Hong Kong, supplies the Chinese market with high brightness LEDs used in lighting, signs and screens.

Under terms of the deal, Cree will pay $70 million in cash and 7.6 million shares, which the company said are worth $130 million based on the stock's average closing price over the past 20 trading days. The stock closed Friday at $16.25 on the Nasdaq Stock Market.

Cree may pay another $125 million in any combination of cash and stock if Cotco reaches unspecified financial targets within two years.

Cree expects the acquisition to boost 2008 earnings per share by 5 percent to 10 percent from the 43 cents currently projected by Wall Street. The company projects sales will be 10 percent to 15 percent higher than the Street's estimate of $415 million.

The transaction, which is subject to customary closing conditions, is targeted to close by late March or April. Cotco also agreed to hold the Cree shares until one year after the closing date, at which time Cotco may sell or transfer up to 50 percent of the stock.