Sumitomo Chemical to acquire Cambridge Display

TOKYO,JAPAN and CAMBRIDGE,UK—Sumitomo Chemical Company and Cambridge Display Technology (CDT) have entered into a definitive merger agreement whereby Sumitomo Chemical will acquire CDT, a developer of technologies based on polymer organic light emitting diodes (P-OLEDs).

TOKYO,JAPAN and CAMBRIDGE,UK—Sumitomo Chemical Company and Cambridge Display Technology (CDT) have entered into a definitive merger agreement whereby Sumitomo Chemical will acquire CDT, a developer of technologies based on polymer organic light emitting diodes (P-OLEDs).Under the merger agreement, Sumitomo Chemical will acquire all outstanding shares of CDT common stock at a price of $12/share in cash, for an aggregate pur-chase price of $285 million.

“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 CDT. “CDT and Sumitomo Chemical have developed a more integrated and closer relationship since Sumitomo acquired a license to certain IP from CDT in 2001,culminating in the formation of a 50/50 joint venture in 2005 to develop, manu-facture, and sell P-OLED materials to CDT licensees and others.”

Completion of the merger is subject to CDT stockholder approval and other customary closing conditions.The acquisition is expected to close during the third or fourth quarter of 2007.

“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, ”said Hiromasa Yonekura, president of Sumitomo Chemical. “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.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.”

Reaction to the deal on Wall Street was mixed. According to The Motley Fool(August 13, 2007), “What (does) it mean for shareholders of Cambridge’s arch rival in the field of OLED research, Universal Display? On the one hand, this is badnews, in that it gives Cambridge a strongfinancial backer to finance its research efforts, and keep it competing and com-petitive with Universal Display. On theother hand, the news is both good andbad for Universal Display shareholders.Good because it gives some context for valuing their own investments in Universal Display. At a total purchase price of $285 million, Sumitomo appar-ently valued Cambridge and its technology at 29 times sales. Bad because (don’tlook now) Universal Display shares are fetching closer to 46 times revenues.”

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