Recently, the electronic materials company Nanda Optoelectronics announced that, in order to further optimize resource allocation and enhance the company's profitability, it plans to acquire a 57.97% equity stake in Shandong Feiyuan Gas Co., Ltd. (hereinafter referred to as "Feiyuan Gas") through cash acquisition and capital increase.

The announcement shows that this transaction is divided into two parts, with a total amount of approximately 247 million yuan. The first part involves Nanda Optoelectronics acquiring a 17.07% equity stake in Feiyuan Gas (corresponding to a registered capital of 11 million yuan before the transaction) held by Shandong Huantai Lutai Road Engineering Co., Ltd. for 36.85 million yuan. The second part involves Nanda Optoelectronics subscribing to an additional registered capital of 62.6866 million yuan in Feiyuan Gas for 210 million yuan. Of the capital increase, 62.6866 million yuan will be recorded as Feiyuan Gas's registered capital, and the remainder will be recorded as Feiyuan Gas's capital reserve.

After the completion of this transaction, Feiyuan Gas's registered capital will change to 127 million yuan, and Nanda Optoelectronics will hold a 57.97% equity stake in Feiyuan Gas (corresponding to a registered capital of 73.6866 million yuan after the transaction), making Feiyuan Gas a subsidiary controlled by Nanda Optoelectronics.

Information shows that Feiyuan Gas was established in July 2019 through a spin-off from Shandong Feiyuan Technology Co., Ltd. (hereinafter referred to as "Feiyuan Technology"). Feiyuan Technology, established in April 2015, primarily produces products such as nitrogen trifluoride, sulfur hexafluoride, tungsten hexafluoride, carbon tetrafluoride, iodine pentafluoride, hexafluorobutadiene, and octafluorocyclobutane, with nitrogen trifluoride (NF3) and sulfur hexafluoride (SF6) being the main products.

It is reported that NF3 has excellent etching rate and selectivity, and does not contaminate surfaces, making it an excellent plasma etching gas in the electronics industry, mainly used in the integrated circuit and panel display industries. SF6 has good electrical insulation properties and excellent arc extinguishing performance, and high-purity electronic-grade SF6 is an ideal electronic etching agent, widely used in dry etching (Etch) processes in display panels and semiconductor processing.

The announcement points out that Feiyuan Technology has total assets of 300 million yuan and fixed assets of 180 million yuan, and has completed the construction of a 1000-ton NF3 project and a 2000-ton SF6 project, which began mass production in March and May 2016, respectively. The company has become a core NF3 supplier for major semiconductor and display panel manufacturers such as TSMC, BOE, CSOT, IVO, and Chongqing HKC in the electronics industry.

In July 2019, Feiyuan Technology spun off its fluorine-containing electronic specialty gas business, including NF3 and SF6, into Feiyuan Gas (the target company of this acquisition) to clarify its main business direction. Feiyuan Gas focuses on and specializes in high-purity NF3, SF6, and other fluorine-containing specialty electronic gases, and will be committed to the research, production, sales, and service of more fluorine-containing electronic specialty gases in the future.

Nanda Optoelectronics stated that Feiyuan Gas, as the only private enterprise among the major domestic NF3 suppliers, has achieved comprehensive breakthroughs in the preparation, filling, safe production, quality control, and safe transportation of NF3 products. By supplying in bulk to leading domestic and international electronics companies, it has accumulated rich market and customer service experience.

The feasibility study report released by Nanda Optoelectronics shows that TSMC completed certification in 2017 and began bulk purchasing NF3 products from Feiyuan Gas. SMIC completed sample testing of Feiyuan Gas in 2018 and began supplying.

Nanda Optoelectronics was established in 2000 and is a company specializing in the research, production, and sales of high-purity electronic materials, with four main business segments: MO source, electronic specialty gases, ALD/CVD precursor materials, and photoresist.

Nanda Optoelectronics believes that there is strong synergy between the two companies in terms of customers, technology, management, and capital. This transaction will significantly enhance the core competitiveness of Feiyuan Gas and also has important strategic value for the layout and development of Nanda Optoelectronics' electronic specialty gas business.