Cree to Focus on Lighting Business by Spinning Off Power and RF Subsidiary

Cree announced that Cree’s wholly owned Power and RF subsidiary has submitted a draft registration statement on a confidential basis to the U.S. Securities and Exchange Commission for a potential initial public offering of the subsidiary’s Class A common stock.

The type and number of shares of stock to be sold and the price range for the proposed initial public offering has not yet been determined, although Cree intends to remain the majority stockholder of the subsidiary post offering. The initial public offering is expected to commence after the Securities and Exchange Commission completes its review process, subject to market and other conditions. The Power and RF subsidiary is raising capital to invest directly in the business to support targeted future growth.

The company’s power and RF business amounted for less than 10% of the company’s revenue, and is estimated to generate about $125 million in the current fiscal year, reported The News and Observer.

The offering would enable Cree management to focus on Cree’s LED and Lighting businesses, while also creating a dedicated focus on the Power and RF business. The company believes that this transaction should allow Cree shareholders to better realize the full value of both businesses.

An Investors.com report noted under the SEC filing, Frank Plastina, a current Cree board member, will be the interim executive vice president of the division, effective June 8. He will be serving as the company CEO after the IPO.

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