Leading optoelectronic device manufacturer, POET Technologies Inc, has signed a definitive agreement for the sale of its wholly-owned Singapore-based subsidiary DenseLight Semiconductors.
In connection with the sale, which requires approval from the company’s shareholders, POET has posted the Share Sale Agreement (SSA) on SEDAR and published a Management Information Circular (Circular) for the Annual and Special Meeting of the Shareholders (the Meeting), set for September 20, 2019, via the TSX Trust website. The Meeting will be held at 10:00 a.m. Eastern Time at Vantage Venues 150 King Street West, 27th Floor, Toronto, Ontario, on Friday, September 20, 2019. Representatives of the buyer of DenseLight intend to be present at the Meeting.
The buyer of DenseLight 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 a total consideration of US $28 million, which includes US $2 million 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 leading developer and manufacturer of Gallium Arsenide-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 China’s leading developer of GaN-based electronic devices for RF microwave and industrial control in 5G mobile communication and broadband communication. None of the companies or individual shareholders has material interests in businesses that are competitive with DenseLight.
The transaction is expected to close on or before October 31, 2019, with the period between signing and closing 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 and 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 POET’s proposed sale of DenseLight, the company will also conduct annual business, including the election of directors and ratification of the appointment of the company’s auditors, Marcum LLP.