POET agrees sale of DenseLight for $28m to Dynax-led concern

POET Technologies Inc of Toronto, Ontario, Canada and San Jose, CA, USA — a designer and manufacturer of optoelectronic devices, including light sources, passive waveguides and photonic integrated circuits (PIC) for the sensing and datacom markets — has signed a definitive agreement with respect to the sale of its Singapore-based subsidiary DenseLight Semiconductors Pte Ltd (announced in February).

In connection with the sale (which requires approval from shareholders), POET has posted the share sale agreement (SSA) on SEDAR and published a management information circular for the Annual and Special Meeting of Shareholders at 10am Eastern Time on 20 September (at Vantage Venues 150 King Street West, 27th Floor, Toronto) via the TSX Trust website (http://docs.tsxtrust.com/2042). Representatives of the buyer of DenseLight intend to be present at the meeting.

The buyer is DenseLight Semiconductor Technology (Shanghai) Co Ltd (DL Shanghai), a special-purpose company recently organized by China Prosper Group on behalf of investors. DL Shanghai was established to acquire the capital stock of DenseLight from POET for US$28m, which includes US$2m that will be paid to Oak Capital Investment Company Ltd (an affiliate of China Prosper Group) for due diligence, negotiation and other services rendered to the buyer in connection with the share sale agreement. The lead shareholders in DL Shanghai are expected to be Dynax Semiconductors (Suzhou Nengxun High Energy Semiconductor Co), one of Dynax’s major shareholders, the Suzhou Xiang Cheng District Investment Fund and a developer and manufacturer of gallium arsenide (GaAs)-based fiber lasers and optical passive devices for high-powered lasers. Other shareholders include established funds and investors in the technology and communications industry in China. Dynax is said to be China’s leading developer of gallium nitride (GaN)-based electronic devices for RF microwave and industrial control in 5G mobile communication and broadband communication. None of the companies or individual shareholders have material interests in businesses that are competitive with DenseLight.
The transaction is expected to close on or before 31 October, allowing for both POET shareholder approval and the activities in which DL Shanghai is currently engaged, including the transfer of ownership interests to investors and assisting with foreign currency transfers prior to the closing.

Following closing, DenseLight’s operation in Singapore is expected to be expanded, both to support the preferred supply and strategic cooperation agreements negotiated with POET as part of the share sale agreement and to serve an expanded market presence in China. Future plans include the construction of a high-volume manufacturing plant in Suzhou, expansion of sales & marketing efforts in China and elsewhere, and a potential public listing for DL Shanghai in China.

At the meeting, in addition to approving resolutions related to the proposed sale of DenseLight, POET will also conduct annual business, including the election of directors and ratification of the appointment of its auditors Marcum LLP.

See related items:

POET reschedules shareholder meeting to allow more time for internal approvals of DenseLight sale

POET announces bridge financing exceeding needs till DenseLight sale

POET receives US$26–30m offer for DenseLight subsidiary

POET completes acquisition of DenseLight

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