UK wafer production firm IQE has acquired US company EMD, which specialises in epitaxial wafers for wireless products, in a deal worth $16m.
EMD employees from the US will all be offered employment by IQE and the firm will continue to be run as a standalone business in New Jersey.
“This acquisition represents a significant opportunity for IQE to enhance its leading position as the global supplier of customised wafer products and outsource wafer services to the semiconductor industry," said Dr Drew Nelson, president and chief executive of IQE.
"The addition of EMD’s products, employees and intellectual property will clearly enhance IQE’s position as the leading player in the epitaxial foundry industry.
"With both MOCVD and MBE wireless platforms, as well as diverse range of MOCVD based optical products, IQE will be able to offer its customers the broadest and most advanced range of technologies and products in the semiconductor industry."
The financial year for 2005 saw EMD's revenue total $12.2m, with earnings before taxes and exceptional items of $0.1m.
In order to fund the acquisition, IQE is making a public offering of 87 million shares to raise around £12m (before expenses).
Scott Massie, chief operating officer of Emcore, the former owner of EMD, said: “The sale of this division will lower our cost base, improve gross margins company-wide and permit us to further consolidate operations in New Mexico and California.”
IQE has also released a trading update, which it said it expects first half 2006 revenue to reach £14.5m, up 30 per cent on the second half of 2005.
"All of IQE’s four business units have grown during the first half of 2006, particularly the wireless division, IQE Inc, located in the US, and IQE Silicon in the UK. Both the optical and substrate businesses have also grown significantly, and are both set to grow even more strongly in the second half," said Nelson.
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