Why Semiconductor Company Transphorm Shares Are Rocketing Today

Transphorm Inc TGAN shares are zooming by around 30% after it disclosed its acquisition by Renesas Electronics Corp RNECF for about $339 million.

As per the deal, Renesas will acquire TGAN for $5.10 per share in cash, reflecting a premium of around 35% to its closing price on January 10, 2024, a premium of approximately 56% to the volume-weighted average price over the last twelve months and a premium of roughly 78% to the volume weighted average price in the previous six months. 

TGAN’s board of directors has unanimously approved the acquisition deal concerning the transaction and recommended that its stockholders adopt such a definitive agreement and approve the merger. 

Concurrently with the execution of the deal, KKR Phorm Investors L.P., which holds approximately 38.6% of TGAN’s shares, has entered into a customary voting agreement with Renesas to vote in favor of the transaction.

The transaction is expected to close in H2 of 2024, subject to shareholders’ approval, required regulatory clearances, and the satisfaction of other customary closing conditions.

Hidetoshi Shibata, CEO of Renesas, said, “The addition of Transphorm’s GaN technology builds on our momentum in IGBT and SiC. It will fuel and expand our power portfolio as a key pillar of growth, offering our customers the full ability to choose their optimal power solutions.”

Primit Parikh, Co-founder, President and CEO of Transphorm and Umesh Mishra, Co-founder and CTO of Transphorm, said, “This transaction will also allow us to offer further expanded services to our customers and deliver significant immediate cash value to our stockholders. Additionally, it will provide a strong platform for our exceptional team to further Transphorm’s leading GaN technology and products.”

Price Action: TGAN shares are up 30.34% at $4.94 premarket on the last check Thursday.