Cree, Inc. 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.
For the three months ending March 29, the subsidiary reported $31 million, or nearly 8 percent the company’s total revenue. The unit had $11.3 million in assets. Annualized, the subsidiary sells about $120 million in product and services. According to the SEC filing, Cree Board member Frank Plastina will be the interim executive vice president of the division, effective June 8, and Plastina will serve as CEO if the IPO is successful.
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 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 stated that it believes that this transaction should allow Cree shareholders to better realize the full value of both businesses.
