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Posted: Jan 18, 2011

Carbon Nanotube Specialist Unidym Acquired by Wisepower Co. for up to $140 Million Earn-Out Plus $5 Million Upfront

(Nanowerk News) Arrowhead Research Corporation today announced that its Unidym, Inc. subsidiary has been acquired by Wisepower Co., Ltd., a publicly-traded, Seoul, Korea-based electronics company. Upfront consideration to Unidym shareholders consists of Wisepower stock and convertible bonds valued at US $5,000,000 with certain restrictions as to timing of stock sales. Unidym shareholders are also entitled to cash earn-out payments up to US $140 million based on cumulative sales and licensing milestones. Finally, Unidym shareholders will receive 40% of licensing revenue from a set of patents that have been generating increasing quarterly royalties in addition to the potential $140 million earn-out. The transaction enables Arrowhead to substantially decrease its burn rate, focus exclusively on nanomedicine, and retain significant upside exposure as Unidym penetrates its target markets with the help of an experienced partner in Wisepower.
Wisepower is a leading supplier of Li-polymer batteries for mobile appliances in Asia, and its current customers include cellular phone manufacturers such as LG Electronics, Pantech, and KTFT. Wisepower has recently developed high quality LED packages and solid-state lighting. The company's products also include wireless charging systems for electronic applications. Wisepower's deep relationships with many potential Unidym customers and experience growing electronics businesses fit well with Unidym's leadership in carbon nanotube technology for electronics applications. Wisepower is well-positioned to help Unidym develop manufacturing scale-up and customer acquisition as it moves into the market adoption phase of its business.
"Unidym has built significant value by identifying and developing a large set of market opportunities for carbon nanotube based electronic products," said Christopher Anzalone, Arrowhead's CEO. "Now that Unidym is pushing into the marketplace, Wisepower's resources and market reach will be critical to its ability to grow revenues. The acquisition structure enables Arrowhead to potentially extract substantial value over time as Unidym's technology is adopted on a wider scale and as revenue grows."
Completion of this transaction represents the achievement of an important strategic goal for Arrowhead. The Company has evolved from a diversified nanotechnology company addressing multiple industries to a focused nanomedicine company, and the Unidym sale is the final step in this transition. This enables Arrowhead to allocate its resources toward a single industry, operate and grow in a more cohesive fashion, and it lays the groundwork for Arrowhead to emerge as a leader in the field.
"We are able to further increase our operational efficiencies by building a team of professionals with a single industry focus and by enabling more synergies among our subsidiaries," continued Dr. Anzalone. "This transition is also potentially beneficial to shareholder value from an outward-looking perspective. We now have a far simpler and more cohesive story to articulate to analysts and institutional investors, and I am confident that our value proposition will fit more neatly into investors' established frameworks. The ability to focus our resources, including cash flow from the Unidym sale, on continued investment in our current nanomedicine companies and strengthening our relationships with potential pharma partners should allow us to maximize each subsidiary's success and, therefore, shareholder value."
Source: Arrowhead Research Corporation (press release)
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