Cree to Acquire Nitres for More Than $158 Million in Stock

Cree, Inc.nics manufacturer <%=company%> (Durham, NC) has signed a definitive agreement to acquire privately held nitride-based semiconductor specialist Nitres Inc. (Westlake Village, CA). Under the terms of the agreement, Cree will acquire all of the outstanding and vested shares of Nitres stock in exchange for approximately 1.5 million shares of Cree common stock in a pooling of interests transaction; based on the April 12 closing price of 105 ¾, the stock is worth approximately $158.6 million dollars.

In connection with the transaction, Cree will issue approximately 350,000 unvested Cree shares in exchange for unvested Nitres shares and assume all outstanding Nitres stock options and warrants which will be exercisable for approximately 150,000 shares of Cree common stock.

Nitres has developed a unique design for light-emitting diode (LED) structures and has demonstrated nitride-based LEDs in the ultraviolet-to-blue range (400 to 410 nm peak wavelength) with a quantum efficiency of 20%, which it touts as the highest reported to date. The technology will complement Cree's silicon carbide (SiC) device manufacturing process and enable the development of solid-state light engines for commercial applications. In addition, both companies have been working on high power nitride-based microwave devices.

Nitres will become a wholly-owned subsidiary called Cree Lighting Co. The transaction is expected to be completed by the end of May 2000. Cree will take a one-time fourth quarter charge of approximately $3.5 million.

Edited by Kristin Lewotsky