APEI acquired by Cree of N.C.

Fayetteville firm builds tech parts

Fayetteville-based Arkansas Power Electronics International has been acquired by Cree Inc., a North Carolina company that markets and produces light-emitting diode technology and semiconductor products.

The terms of the deal were not released. The transaction will not have material impact on fiscal 2016 earnings, Cree said in a statement Thursday.

APEI develops and builds highly efficient, sometimes tiny, electronic components for a wide variety of applications, including defense, aerospace and hybrid vehicles. It primarily produces silicon carbide semiconductors, multichip power modules, high-temperature packaging for electronic components and high-temperature circuits.

Cree shares moved down slightly on the news of the deal, closing at $24.80, down 7 cents or less than 1 percent, in trading Thursday on the Nasdaq. Shares have traded as low as $23.63 and as high as $50.63 over the past year.

In August, the company reported revenue of $1.65 billion in fiscal 2014, up nearly 20 percent compared with a year earlier. Net income was $124 million, or $1.01 per share, up 43 percent compared to fiscal 2013. Results for the company's fourth quarter and fiscal 2015 are expected Aug. 11.

John Palmour, co-founder of Cree and chief technology officer of Cree's power and radio frequency segment, said the two companies had worked together in the past and APEI brings expertise in silicon carbide semiconductors and research capabilities to the table. He said APEI is a logical choice to add to the company's power and radio frequency segment.

Palmour said there are no plans for any staff reductions at APEI, which will now be known as Cree Fayetteville Inc., and that the company is considering expanding the operation.

Cree Fayetteville has a commercial 10,000-square-foot aerospace manufacturing facility at its headquarters in the Arkansas Research and Technology Park, where it employs 50.

Alex Lostetter, former president and chief executive officer of APEI, and now vice president of Cree Fayetteville Group, said the company's manufacturing capability was one of several factors that attracted interest from Cree.

Based in Durham, N.C., Cree has operations across the globe. It employs more than 7,000 people, with more than half of those working in the United States.

Cree shares fell nearly 15 percent in June after it said it would restructure its LED chip and component segment to reduce excess capacity and overhead and to improve the cost structure moving forward. The company also authorized a $500 million stock buyback for fiscal 2016.

In May, the company submitted draft plans to the Securities and Exchange Commission for the potential to separate its power and radio frequency division into a separate, publicly traded company. Cree Fayetteville would be part of that move, Palmour said. Such as separation allows a company to capitalize a segment that might not be part of its key operations, while retaining its equity stake.

APEI was founded in 1997.

Business on 07/10/2015

Upcoming Events