News Article
Tower to offload Saifun stake for $39 million
Israeli pure-play foundry Tower Semiconductor has agreed to sell all of its holdings in Israel-based fabless memory supplier Saifun Semiconductor to a US private equity investor for around $39 million in cash.
Israeli pure-play foundry Tower Semiconductor has agreed to sell all of its holdings in Israel-based fabless memory supplier Saifun Semiconductor to a US private equity investor for around $39 million in cash.
Under the deal, Tower may receive additional payments through August 2005 subject to certain future events. A 1997 agreement between Tower and Saifun on non volatile memory technology remains unchanged.
Following the transaction, Tower will record a $32 million capital gain in the fourth quarter. The company has made a significant profit on the deal as it bought its stake in Saifun for only $6 million.
Tower chairman and chief executive officer Carmel Vernia said that the cash raised from the sale would be ploughed back into the business to aid expansion. "This transaction and its timing is an important step in our Fab 2 financing plan and, together with the recently announced cost reduction measures, would enable us to focus on growing our businesses."
The closing of the transaction is expected within the next few weeks. The transaction is subject to the rights of first refusals held by Saifun's other shareholders and receipt of regulatory approvals.
Under the deal, Tower may receive additional payments through August 2005 subject to certain future events. A 1997 agreement between Tower and Saifun on non volatile memory technology remains unchanged.
Following the transaction, Tower will record a $32 million capital gain in the fourth quarter. The company has made a significant profit on the deal as it bought its stake in Saifun for only $6 million.
Tower chairman and chief executive officer Carmel Vernia said that the cash raised from the sale would be ploughed back into the business to aid expansion. "This transaction and its timing is an important step in our Fab 2 financing plan and, together with the recently announced cost reduction measures, would enable us to focus on growing our businesses."
The closing of the transaction is expected within the next few weeks. The transaction is subject to the rights of first refusals held by Saifun's other shareholders and receipt of regulatory approvals.
