Benzinga | Mar 4, 2021 11:31AM EST

Allegro Microsystems To Divest Thailand Manufacturing Facility For $30M

* Sensing and power semiconductor technology provider Allegro Microsystems Inc (NASDAQ: ALGM) inked an agreement to divest its Thailand manufacturing facility to an undisclosed purchaser for $30 million.

* The divestment is estimated to streamline Allegro's back-end operations and boost gross margin.

* Allegro previously announced its back-end facility consolidation plans as part of a multi-year strategic transformation to optimize its manufacturing footprint and reduce fixed costs.

* Last quarter the company shared the successful production transfer from AMTC into its Manila, Philippines facility (AMPI) ahead of the slated time. The AMTC facility closure and divestment will complete the company's transition to a fabless, asset-lite manufacturing model.

* Allegro will incur a one-time non-cash impairment charge between $7 million and $9 million to the book value of the facility in the present quarter.

* Allegro completed its $350 million IPO last November.

* The stock lost around 6% in the last week.

* Price action: ALGM shares are down 5.91% at $25.07 on the last check Thursday.