Sumitomo Chemical says that the deal will enable it to step up its efforts on the early commercialization of P-OLED displays, particularly large-screen, high-definition televisions, with a view to the possibility of alliances with display manufacturers.
Sumitomo Chemical will acquire all outstanding shares of CDT common stock at a price of $12 per share in cash, for an aggregate purchase price of approximately $285 million. This represents a 95 percent premium over CDT's closing share price of $6.15 on July 30. CDT was established in 1999 and had sales of $8 million in 2006.
In November 2005, Sumitomo Chemical and CDT established the joint venture Sumation Co., Ltd. for the development, manufacture and sale of P-OLED materials. The companies say that the combination of their technologies has achieved remarkable advances in materials performance, and is now approaching the level of practical application.
Polymer OLEDs (P-OLEDs) are processable in solution and can therefore be applied using a printing technique to form the luminescent substrate, making possible the highly productive manufacture of large-size panels at low cost.
The market for P-OLEDs is expected to see rapid growth going forward, primarily for use in next generation displays for large-screen televisions and in lighting applications.
Sumitomo Chemical's development of P-OLEDs began in 1998, and the Japanese company has worked with CDT since 2001 under an agreement that included technology licensing for light-emitting materials. In May 2002, Sumitomo Chemical made equity investment in CDT Ltd. to build a closer working relationship for the commercialization of P-OLEDs.
CDT possesses fundamental intellectual property related to OLED displays and materials, while Sumitomo Chemical possesses a broad range of state-of-the-art chemical technologies.
This acquisition, integrating the two companies' business resources, will enable Sumitomo Chemical both to improve the performance of light-emitting materials and OLED display-related materials and also to further accelerate the development of commercial technologies for the manufacture of OLED displays, serving its customers as a total solution provider to meet their diverse requirements from materials to processes.
In connection with this transaction, major CDT shareholder Kelso & Company along with certain members of CDT's senior management and other shareholders holding cumulatively an approximate 43% of CDT's common stock have entered into agreements to vote all their shares in favor of the transaction at their shareholders' meeting.
