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Shareholders approve IQE's Emcore acquisition

Emcore's electronic materials division is bought by UK-based IQE in a $16 million cash deal.

Epiwafer supplier IQE has completed its acquisition of Emcore's electronic materials division (EMD).

IQE shareholders approved the deal, which included the issue of 87.5 million new shares in the company onto London's AIM stock exchange in a bid to raise £12 million ($22.7 million), at an extraordinary general meeting last week.

The Cardiff, UK, company has made an initial payment of $13 million to Emcore, and will complete the balance of the purchase through four equal quarterly payments totalling $3 million.

According to IQE, the acquisition has created the world's leading outsourced supplier of epiwafers to the RFIC market.

Happy to have completed the deal, IQE's CEO Drew Nelson said, "The joining of the two companies allows IQE to offer a truly one-stop wafer outsource service, with a complete range of current and next-generation products."

EMD has concentrated mainly on providing HBT wafers for power amplifier applications, while IQE has a substantial contract to provide PHEMT material.

IQE already had good traction in the wireless business through the MBE expertise at its US division in Bethlehem, PA, but the purchase of EMD adds new technologies based on MOCVD deposition, such as integrated BiFET and advanced GaN-based structures.

All 56 staff at EMD's Somerset, NJ, location - including its management team - have been offered jobs with the new owners, and are said by Emcore to have transferred.

Gartmore Investments and Nortrust Nominees are among the investors to have purchased the new share capital. The asset management companies invested £2.1 million and £1.8 million respectively.

In total, the newly-issued share capital represents 21.6 per cent of the enlarged company.

Shares in IQE were trading at just over 16p shortly after the announcement was made.

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