Shares of Cambridge Display Technology Inc. (CDT) (Nasdaq: OLED) soared throughout the day, closing up $5.47, about 89 percent, to $11.62 at the market’s close – easily surpassing the company’s 52-week high of $7.88.
Cambridge announced today it has agreed to be acquired for $12 per share, an aggregate of $285 million, by its Japan-based licensee Sumitomo Chemical Co. to expand its display material business.
“In recent years, Sumitomo Chemical has positioned its display materials business as one of its strategically important business areas and an area of focus for our business resources. P-OLEDs are expected to see considerable market growth in the future as next-generation materials for flat panel displays and lighting applications, and our company is actively engaged in the development of new materials and the improvement of device technologies,” Hiromasa Yonekura, president of Sumitomo Chemical, said in a statement.
Polymer Organic Light Emitting Diodes (P-OLEDs) are used in flat-panel displays – they’re thin and lightweight power devices that emit light when electricity flows through the device. It’s the same technology applied to mobile phones, MP3 players and medical equipment. That said, it’s a booming market – one that both companies intend to bank on.
“We have built a close cooperative relationship with CDT up to this point, and the complete integration of both companies’ technological and intellectual assets through this acquisition will make it possible to greatly accelerate development. We are very grateful for the support of the CDT board of directors and major shareholders, and I am pleased to extend a warm welcome to all our colleagues at CDT on behalf of Sumitomo Chemical,” said Yonekura.
The merger is expected to be finalized by the third or fourth quarter and is subject to shareholder approval.
“I am delighted to recommend this merger to our stockholders, as is the entire board of directors. I believe that the acquisition of CDT by Sumitomo Chemical will significantly enhance the prospects for P-OLED technology adoption, especially as P-OLED is looking ever more likely to become the next mainstream display technology,” said David Fyfe, chairman and CEO of Cambridge.
“We have admired the long term commitment of Sumitomo Chemical to the development of this very important technology and believe this merger is not only in the best interest of our shareholders but also of our employees and the global display industry,” Fyfe added.
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