In a notable transaction, several entities under global investment firm KKR & Co. Inc. (NYSE:KKR) have sold their entire stake in semiconductor company Transphorm, Inc. (OTCMKTS:TGAN). The collective sale amounted to approximately $124.5 million, at a price of $5.1 per share.
The transaction, which took place on June 20, 2024, involved the sale of 24,411,968 shares of Transphorm's common stock. This move came as a result of a merger agreement between Transphorm and Renesas Electronics America Inc., where each outstanding share of Transphorm was converted into the right to receive $5.10 in cash.
KKR entities, including KKR Phorm Investors L.P., KKR Group Partnership L.P., KKR Group Holdings Corp., KKR Group Co. Inc., and KKR Management LLP, were all reported as sellers in the transaction. Henry R. Kravis and George R. Roberts, both founding partners of KKR Management LLP, were also listed as reporting owners, though they have disclaimed beneficial ownership of the securities sold, except to the extent of their pecuniary interest.
The sale marks the exit of KKR's investment in Transphorm, a company known for its advancements in semiconductor technology. This transaction is significant as it reflects a substantial cash-out event for the investment entities involved. Following the sale, these KKR entities no longer hold shares in Transphorm, indicating a complete divestment from the company.
Investors and market watchers often pay close attention to such large-scale transactions, as they can signal strategic shifts within investment firms and impact the market's view of the involved companies. The complete sale of Transphorm shares by KKR entities underscores the dynamic nature of investment strategies in the fast-paced semiconductor industry.
In other recent news, Transphorm Inc. has been acquired by Renesas Electronics America in a cash deal. The merger, which resulted in Transphorm becoming a wholly owned subsidiary of Renesas, saw each share of Transphorm's common stock converted into the right to receive $5.10 in cash. The agreement also led to significant changes in Transphorm's corporate governance, with new appointments and departures among the company's board of directors and officers.
Post-merger, Sailesh Chittipeddi has been appointed as the sole director of Transphorm. The company has also notified The Nasdaq Stock Market LLC of the merger's completion and requested the delisting of its common stock. Following this, Transphorm will file a Form 15 with the SEC to terminate the registration of the common stock and suspend its reporting obligations.
The total consideration paid by Renesas for Transphorm's equity amounts to approximately $345 million. These recent developments are expected to enhance Renesas' portfolio and market position in the semiconductor industry.
InvestingPro Insights
Following the significant transaction involving KKR & Co. Inc.'s divestment from Transphorm, Inc., market participants may be seeking deeper insights into Transphorm's financial health and future prospects. According to InvestingPro data, Transphorm has a market capitalization of $301.58 million, indicating a moderate size within the semiconductor industry. The company's price-to-book ratio as of the last twelve months ending in Q3 2024 stands at 17.71, suggesting a premium valuation compared to its book value. Additionally, Transphorm has experienced a revenue growth of 2.79% during the same period, reflecting a steady increase in sales.
InvestingPro Tips reveal that analysts expect sales growth in the current year for Transphorm. This aligns with the company's recent revenue uptick and could be a driving factor for future valuation. However, it's noteworthy that Transphorm is not currently profitable, with analysts not anticipating profitability this year. Furthermore, the company has been operating with a moderate level of debt, which investors should consider when evaluating the company's financial leverage and risk profile.
For investors looking for comprehensive analysis and additional insights, there are more InvestingPro Tips available for Transphorm. These tips could provide valuable information for making informed investment decisions. To explore these further, investors can visit InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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