#None #San Jose #Semiconductor #Spectra7 Microsystems #Parade Technologies

New Beginnings for Spectra7 Microsystems and Parade Technologies

In a significant move within the semiconductor industry, Spectra7 Microsystems Inc. has announced a finalized agreement with Parade Technologies, Ltd., marking a new chapter in their business endeavors. This agreement facilitates the acquisition of the majority of Spectra7's assets, which is expected to enhance Parade's offerings in high-performance analog semiconductors crucial for the AI revolution and advanced connectivity solutions.

Details of the Asset Sale

Under the terms of the agreement, effective as of March 7, 2025, Parade Technologies will take over a substantial portion of Spectra7’s operations, including its portfolio of intellectual property, products, designs, and inventory. This move allows Parade to scale its technological capabilities and better serve its customer base. Spectra7’s innovative SiGe technology, which is known for achieving exceptional data speeds of 112 Gbps and beyond, will particularly aid Parade’s expansion into thriving markets such as data centers and AI-driven gadgets.

Omar Javaid, CEO of Spectra7, expressed enthusiasm about the collaboration, stating, "We are thrilled by this outcome and excited to close this transaction. Our pioneering work has found a great partner in Parade, ensuring our customers continue to receive top-tier support and products."

Financial Breakdown of the Transaction

The purchase price for the asset acquisition is set at USD 9 million, which approximately translates to CAD 12.93 million. This amount will be settled in cash, with certain deductions for loans and escrow agreements already outlined in the deal. Notably, Spectra7 intends to distribute the net proceeds from this sale to its shareholders, which is anticipated to be done through two special distributions.

The first estimated special distribution is pegged around USD 3.3 million (approximately CAD 4.74 million), granted to shareholders post-closing minus transaction costs. A subsequent distribution of approximately USD 1.8 million (CAD 2.59 million) is projected based on the successful release of escrowed funds.

Bridge Financing for Continued Operations

In conjunction with this acquisition agreement, Parade has also committed to providing financial support to Spectra7 through bridge loans totaling USD 750,000. These loans are aimed at sustaining Spectra7's operational stability until the deal officially closes in the second quarter of 2025. The quick infusion of cash demonstrates Parade's commitment to a smooth transition and the continued viability of Spectra7's operations prior to the asset transfer.

Shareholder Involvement and Approval

For this transaction to progress, it’s currently pending approval from the Toronto Stock Exchange Venture (TSXV) and requires a minimum of 66.67% approval from Spectra7 shareholders during a meeting slated for April 14, 2025. The board of Spectra7 has already voiced support for the transaction, advising shareholders to vote in favor of it.

By securing voting agreements with a significant portion of its shareholders, totaling about 57.62% of outstanding shares, the path to a successful acquisition appears increasingly likely. Spectra7's management anticipates the positive implications this acquisition will have on both parties involved.

Future Outlook

Once the acquisition is finalized, Spectra7 will cease operations in semiconductor product development for a minimum of two years, ensuring Parade's competitive advantage in the market is upheld. Both companies are poised to benefit mutually from this collaboration, which signals a forward-thinking approach in the rapidly evolving semiconductor landscape. Spectra7's technology will not only continue to thrive under Parade’s management but is also expected to unlock new opportunities for innovation in the high-speed communications domain.

As the closure date approaches, industry analysts eagerly await further developments which should shed light on how this strategic acquisition will reshape the competitive dynamics of the semiconductor industry, and the subsequent benefits it promises to deliver to both companies’ clients and stakeholders alike.