Sunedison Inc (NYSE:SUNE) plans Semiconductor IPO early next year
Sunedison Inc (NYSE:SUNE), a semiconductor and solar technology company, has announced its plans to spin off its semiconductor business into an independent traded company. The company’s board of directors have approved an initial public offering (IPO) for Sunedison’s semiconductor unit and form SunEdison Semiconductor.
The newly announced SunEdison Semiconductor will operate as a separate publicly traded company, with new board members.
SunEdison said it would use the proceeds from the IPO to fund initiatives related to the solar business, amongst others. The company also plans to repay existing indebtedness.
The company is planning to file a registration statement with the SEC (Securities and Exchange Commission) in the third quarter of 2013, with the IPO scheduled by early next year. However, the company is yet to finalize on the amount of stake to be sold to the public during the initial public offering. According to the company, the final decision would be taken by Sunedison’s board of directors.
SunEdison CEO Ahmad Chatila said the announcement marks the “next evolution” in SunEdison’s strategic plan. This will help the company better position itself in both the solar and semiconductor segments, and will result in long-term success. Chatila added that the new organizational structure will enable both separate companies to pursue value generating strategies for shareholders, focus on important markets, and improve access to growth capital for each company in future.
Following the spin-off news, SunEdison was upgraded by Needham & Company from a “hold” to a “buy” rating. In addition, Zacks reaffirmed a “neutral” rating on the company’s stock, and have set a price target of $6.75.Currently, four analysts have assigned a “hold” rating and three have given a “buy” rating to the company’s stock. SunEdison has consensus rating of “Hold” and an average target price of $8.94.
SunEdison, formerly known as MEMC Electronic Materials Inc., operates in two segments that includes semiconductor materials and solar energy.