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SGH Completes Sale of Majority Stake of SMART Brazil
MILPITAS, Calif.--(BUSINESS WIRE)-- SMART Global Holdings, Inc. (“SGH” or the “Company”) (Nasdaq: SGH) today announced that the Company, through its wholly
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[{"type":"text","content":" MILPITAS, Calif.--(BUSINESS WIRE)--\nSMART Global Holdings, Inc. (“SGH” or the “Company”) (Nasdaq: SGH) today announced that the Company, through its wholly owned subsidiary SMART Modular Technologies (LX) S.à.r.l., completed its previously announced sale of 81% of SMART Modular Technologies do Brasil – Indústria e Comercio de Componentes Ltda. (“SMART Brazil”) to Lexar Europe B.V., an affiliate of Shenzhen Longsys Electronics Co., Ltd.\n\n\nTransaction Summary\n\n\nUnder the terms of the agreement, the purchase price valued 100% of SMART Brazil at an enterprise value of $205 million. This amount has two separate components, an upfront value of $170 million and a deferred value of $35 million.\n\n\nAt closing, SGH received approximately $140 million for 81% of SMART Brazil’s outstanding equity, which amount reflects certain customary adjustments and is net of estimated withholding tax due in connection with the closing. Eighteen months following today’s closing, SGH will receive a deferred cash payment of approximately $28 million (81% of $35 million).\n\n\nIn addition to the upfront and deferred cash payments, SGH has retained a 19% interest in SMART Brazil. During three exercise windows between 2027 and 2029, the parties have a put and call feature for the remaining stake at a put/call price that values 100% of the SMART Brazil business at 7.5x its fiscal year net income.\n\n\nAdvisors\n\n\nIn connection with the transaction, Banco Itaú BBA S.A. acted as financial advisor and Latham & Watkins acted as legal advisor to SGH.\n\n\nUse of Forward-Looking Statements\n\n\nThis press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These statements include, but are not limited to, statements concerning the sale of SMART Brazil and other transactions contemplated by the purchase agreement, including the deferred cash purchase price to be paid eighteen months following the closing and the exercise of the put/call option. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “in...