8 November 2021
5N Plus completes acquisition of AZUR SPACE for €74.6m
Specialty semiconductor and performance materials producer 5N Plus Inc of Montreal, Québec, Canada has completed its acquisition (announced in March) of AZUR SPACE Solar Power GmbH of Heilbronn, Germany (which develops and manufactures multi-junction solar cells based on III-V compound semiconductor materials) for €74.6m (subject to post-closing adjustments), in exchange for 6.5 million shares of 5N Plus, to be issued from the treasury estimated at €13.1m (based on the volume-weighted average trading price for the seven trading days preceding the closing) along with a cash payment of €37.7m. Furthermore, 5N Plus will finance working capital of €23.8m. The cash portion and the working capital of the transaction is funded through the firm’s liquidity and senior debt facility.
5N Plus provides purified metals such as bismuth, gallium, germanium, indium, selenium and tellurium, and also produces related II-VI semiconducting compounds such as cadmium telluride (CdTe), cadmium sulphide (CdS) and indium antimonide (InSb) as precursors for the growth of crystals for solar, LED and eco-friendly materials applications. Operating R&D, manufacturing and commercial centers in several locations in North America, Asia and Europe (including three in Germany and one in Belgium), the firm supplies to the thin-film PV renewable energy industry and is a supplier within the US satellite supply chain.
“AZUR’s acquisition is the linchpin of our strategic transformation toward critical material technology,” says 5N Plus’ president & CEO Arjang Roshan. “Our combined pool of talent and AZUR’s cutting-edge space technology are key enablers for our entry into the larger markets within the field of specialty semiconductor substrates.”
Considering the strategic importance of AZUR and its advanced technologies, the relevant regulatory authorities conducted an exhaustive review to vet 5N Plus as an appropriate acquirer. The firm says that the acquisition is the cornerstone of its transition to advanced materials based on cutting-edge technology. In alignment with its growth strategy, the transaction will enable 5N Plus to expand its product portfolio within specialty semiconductors and position the firm to benefit from potential growth linked to several critical industries that rely on advanced compound semiconductors in the future.
With nearly 60 years of experience in space solar cell manufacturing, AZUR is supported by nearly 120 patent families. 5N Plus reckons that its integration creates a global enterprise with comprehensive competencies across the specialty semiconductor value chain that rivals global competitors, fuels innovation and grants entry to larger markets with significant growth opportunities.
5N Plus says that, as well as a highly skilled and experienced workforce, the acquisition of AZUR brings incremental sales revenue in excess of €50m, a well-established portfolio of business providing €5-7m EBITDA per year, strong backlog, and solid financial support from several agencies (confirming AZUR’s strategic importance).
The combination of 5N Plus and AZUR forms a “one-of-a-kind” ecosystem that will enable:
- a fully integrated suite of compound semiconductor products (a family of IV, III-VI and II-VI materials) from procurement of critical materials to finished epitaxy engineered substrates;
- entry and access to new markets with higher total addressable market (TAM) such as high-power electronics, electric mobility, wireless charging and advanced communications;
- closed-loop management of critical materials including much of its own in-process by-products and those of its customers — enhancing sustainability and competitiveness of the business model;
- unlocking tangible synergies, resulting in more value capture from the space and security markets, it is reckoned.
It is also reckoned that the integrated company will be more diversified, with improved product mix, and will:
- attain 5N Plus’ strategic aim to expand its total addressable market;
- further reduce the reliance on a single customer;
- further reduce the exposure to metal price notations;
- confirm its merger & acquisition (M&A) focus on specialty semiconductors;
- establish 5N Plus’ importance in the critical material space and its strategic position, as perceived by various agencies and governmental bodies