Ladies and gentlemen, thank you for standing by, and welcome to the SMART Global Investor Conference Call. At this time, all participants' lines are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Suzanne Schmidt with Investor Relations.
Thank you, and please go ahead.
Thank you, operator. Good morning, everyone, and thank you for joining us today. Earlier this morning, we issued a press release announcing that SMART has agreed to acquire Cree's LED business. The press release also includes replay information for today's call. Please note that the call today will only address the acquisition of Cree's LED business.
We will have our regular quarterly earnings call for the 2021 later in December. On the call today is Mark Adams, SMART's President and Chief Executive Officer Jack Cacheco, SMART's Chief Operating and Financial Officer and Claude Denby, Senior Vice President and General Manager of Cree's LED business. This call is being webcast from our website at smartgh.com. In addition, you can access today's press release and the accompanying slide presentation on our website under News and Events. Before we begin the call, I would like to note that today's remarks and the answers to questions may include forward looking statements.
Any statement that refers to expectations, projections or other characterizations of future events, including financial projections and future market conditions, is a forward looking statement. Actual results may differ materially from those expressed in these forward looking statements. For more information, please refer to the forward looking statements disclosure in our press release as well as the risk factors discussed in the documents we file from time to time with the SEC, including our most recent Form 10 ks and Form 10 Q. We assume no obligation to update these forward looking statements, which speak as of today. Additionally, we have provided reconciliations of non GAAP financial measures to their GAAP equivalents in our presentation and detailed explanations of non GAAP financial measures in our Form eight ks filed with the SEC.
With that, I will now turn the call over to CEO, Mark Adams. He will begin his prepared remarks on Slide three.
Thank you, Suzanne, and thank you, everyone, for joining us this morning. We're very excited to announce that SMART has agreed to acquire Cree's LED business, a global leader in high power specialty lighting solutions, and we are thrilled to welcome Cree's LED team to the SMART family. Turning to slide four. To summarize, this transaction is valued at up to $300,000,000 based on a purchase price of 175,000,000 and an additional potential earn out of up to $125,000,000 The $175,000,000 purchase price includes a $50,000,000 cash payment upon closing and $125,000,000 seller finance note due August 2023. The $125,000,000 additional earn out comprises $75,000,000 based on achieving certain performance milestones during the first full quarters four quarters following the close and an additional $50,000,000 of potential earn out based on surpassing certain performance milestones over that same time frame.
This transformational transaction is expected to be immediately accretive to non GAAP EPS and free cash flow. And we expect to close in the first calendar quarter of twenty twenty one. Jack will review additional financial details later in the call. Slide five, please. The strategic merits of this transaction are clear on many levels.
First, it advances our growth and diversification strategy, meaningfully transforming our portfolio by adding another revenue stream that is uncorrelated with our other businesses' cycles. Importantly, in addition to diversifying away from memory in Brazil, we also expect its revenue contribution to improve the consistency of our overall earnings. The Cree LED business comprises a broad range of products serving general lighting as well as niche markets, including outdoor and architectural lighting, large format video screens and horticultural. Second, like SMART, Cree LED has a history of providing specialty solutions embedded with advanced technology, creating differentiation and adding value. The addition of Cree builds on SMART's leadership as a global provider of specialty solutions, enabling us to enter the large attractive LED lighting market at scale, where Cree has branded leadership and strong customer relationships.
Third, it complements our existing capabilities with the addition of management and leadership talent as well as strong R and D capability with over 2,000 current and pending patents, coupled with sales and marketing and global channel management. Fourth, it will provide meaningful financial benefits, including expected immediate accretion to adjusted EBITDA, gross margin, non GAAP EPS and free cash flow. And finally, there is significant upside potential as we leverage our proven operating system to drive revenue growth and margin expansion. It's an exciting time at SMART Global Holdings with a lot value creating opportunities ahead. As you can see on Slide six, this acquisition will significantly advance our growth and diversification strategy, which is focused on providing differentiated specialty solutions at scale on a global basis.
We now have four areas of growth: Specialty Compute and Storage Specialty Memory, Brazil and now CreeLED. On a pro form a basis and looking at a last twelve month revenue perspective, the combination of CreeLED with SMART transforms our mix to approximately half specialty compute storage in LED and half memory. Just a few years ago, nearly two thirds of our business was derived solely from Brazil. We've come a long way in a short period of time, and we're just getting started. Moving on to Slide seven.
I wanted to spend some time on highlighting a core advantage of ours, and that is our proven operating system. Operational excellence is a pervasive mindset at SMART, and we have developed capabilities across global manufacturing, supply chain and logistics and information technology, which in its own right is a defensible advantage. We then layer on centers of excellence in finance and human resources, providing the systems and tools to operate with strong financial rigor and attract and develop industry leading talent. Finally, it is our relentless focus on our customers, which quite frankly, we don't talk enough about. This systematic approach is the foundation for our ability to drive above average margins and cash flow as well as to achieve other critical milestones.
Turning to Slide eight. It is this proprietary approach that has led to a strong balance sheet and robust cash generation, allowing us to acquire and successfully integrate Pangolin Computing, Artisan Embedded Computing, In Force and now CreeLED. We've captured meaningful value across these businesses, including gross margin improvement and revenue growth. And we are looking to do it and will do the same with CreeLED. We believe that with renewed focus, strong operating discipline, our manufacturing expertise and synergistic cost benefits, Cree LED will deliver positive performance and significant returns.
With that, please turn to Slide nine for a deeper dive into Cree LED. Founded in 1987, Cree is headquartered in Durham, North Carolina with other locations in China and Hong Kong. We are excited to welcome over 2,000 team members, including approximately 200 engineers, which serves to further strengthen our talent base. To that end, I would like to take a moment to highlight Claude Dembe, who is with us today. Claude will serve as the President of Cree LED, reporting to me upon close.
I have known Claude for these three past years, dating back to when I was the Chief Executive Officer of LumiLeds, a competitor to Cree. Claude is an outstanding leader with a very strategic mindset. At a time when competitors have struggled, Cree has continued to innovate and protect their industry position under his leadership. I look forward to working with Claude and his team as we build this business from here. As a pioneer in LED technology with over 2,000 patents, Cree LED is a proven industry leader.
Overall, the business comprises a broad portfolio of highly efficient LED chips that deliver superior performance for high density LEDs and the broadest portfolio of application optimized lighting class LED components and modules that sets the industry benchmark for performance, light quality and reliability. It represents one of the strongest global brands in LED technology and has a track record of delivering best in class solutions through well established distribution and sales channel. It serves thousands of customers globally. I think it's important to highlight that I was CEO of LumenLED that I mentioned, one of Creed's major competitors. And I have an in-depth understanding of the LED industry as well as Cree's strengths and opportunities.
In terms of financials, for fiscal year 2020, Cree LED delivered $433,000,000 in sales, dollars 91,000,000 in gross margin, which resulted in a 21% gross margin percentage. While COVID has further impacted the markets it serves, we are confident that as part of Smart Global Holdings and with the economic recovery, will achieve outstanding results. As we turn to Slide 10, Cree operates in four markets. It maintains the number one market share position in general lighting and has been leveraging its leadership in high power applications to expand into specialty lighting, such as outdoor lighting, architecture, large format video screens, including stadium lighting and retail in store experience lighting. The $11,000,000,000 LED lighting market has a five year compound annual growth rate of 4.5%, and we're excited to combine Cree's leading market positions, strong product innovation and sticky customer base with Smart's global manufacturing platform and proven operating capabilities to capture more of this opportunity.
Moving on to Slide 11, Let me talk about the specific areas we see for optimization. The first is about the gross margin opportunity. We plan to accelerate Cree's already in flight transition from silicon carbide to sapphire and drive average costs lower as we move to a fabless model, resulting in a CapEx light business. Second is leveraging our proven operating system to drive cost rationalizations. While the acquisition is not totally about overarching synergy play, we expect to achieve 8,000,000 to $10,000,000 in annualized cost savings within a twenty four month period.
And third, strategic imperative is on share gains and taking some of those savings and reinvesting it back into the business to capture the market opportunities I spoke about earlier. At this point, I'd like to turn the call over to Jack for a closer look at the financial benefits of the deal. Jack?
Great. Thanks, Mark, and good morning, everyone. Turning to Slide 13. The Cree acquisition is well aligned with our M and A strategy. Specifically, we look for companies with leadership position and high value niches where differentiation can lead to meaningful margin profiles.
As Mark mentioned, we also look for opportunities where we can apply our proven operating system to drive greater growth, margin expansion and free cash flow generation. And finally, we seek out businesses that have a competitive advantage, including advanced technologies, Tier one customer relationships and are a strong IP position. Cree checks all these boxes while also meeting our stringent internal financial criteria. As you can see on Slide 14, the result of this attractive transaction is a significantly enhanced financial profile for Smart. Looking at the full first full year post close, we expect to deliver top line revenue in the range of 1,500,000,000.0 to $1,600,000,000 a non GAAP gross margin improvement of 200 to 400 basis points and an operating margin expansion of 150 to two fifty basis points non GAAP earnings per share of $4 to $4.25 and added free cash flow of $25,000,000 to $35,000,000 With that, I'll now turn it back to Mark to provide a few closing comments.
Thank you, Jack.
Speaking from Slide 16, we are on a journey to transform SMART, and we have made significant progress on our growth and diversification strategy. Today's announcement is a meaningful step forward on that path. We continue to generate strong free cash flow, allowing us to reinvest in our company and to grow organically. We have developed a track record for successful sourcing, integrating and optimizing acquired assets, a testament to our disciplined approach and proven operating system. To be clear, the addition of LED is truly an exciting opportunity to drive growth and create significant value.
We look forward to completing the transaction in next year and welcoming the Cree LED team to the SMART family. I'm confident with this transaction, we will be better positioned than ever to accomplish our strategic objectives in the years ahead. With that, I'd like to thank you again for joining today, and we will now open the call to your questions.
And our first question comes from the line of Sidney Oath with the Deutsche Bank. Your line is now open.
Great. Thanks everyone and congratulations on the deal. I had a couple of questions. The first one is can you give us a little more color on the criteria you need to meet for you to get to pay the earn out to create? I know, Mark, you talked about splitting that between some earn out meeting some goals and other exceeding some goals, but anything more specific would be helpful.
Sure. Happy to do that. Thanks, Sydney. The way to think about this is there's two tiers to the earn out. There's a goal, and the first goal is $75,000,000 broken up into gross margin and revenue targets.
And at 100%, they will hit the first goal. And if the team surpasses our goals that we've set, they have the ability to earn up to $50,000,000 additionally, which gets you to the $300,000,000 price if they hit and surpass those milestones.
Okay. That's good. My follow-up question is, can you talk about how you see the revenue growth of the LED business given quite steep competition from some of the Asian supplies? I know you guys talked about the TAM growing about 5% a year. Do you think you'll be able to exceed that?
And related to that, Cree has a joint venture with Simon to address certain parts of the market. Is that something you intend to continue?
Hey, thank you for that question. So as you mentioned, let's start off with the market. As we discussed, it's roughly almost 5% annual growth in the broader LED market. In addition, CRE is properly focused and can capture share. I'm convinced of that.
Now let's talk about the overall environment which you referred to as far as the declining LED market, so to speak. We actually don't think it's declining. Now for sure, there's two dynamics that have gone on. On the supply side, you have an industry structure that's been driven and impacted by Chinese investment in LED capacity that has put the industry in some headwinds around excess supply. And that's been a dynamic that's been going on for a few years.
In addition to that, even well before COVID, the demand side was getting hit and became a headwind for the business. And that was signaled by the leaders in the industry, leaders like Acuity and Simplify and others who were struggling with the demand profile of LED lighting, and then taking that into automotive and eventually into mobile phones. And so we believe that the more recent two years of decline around LED revenues and margins have been driven more by the demand that we think is recovering. So you combine the supply excess supply driven primarily by the subsidization of the Chinese manufacturing base, and you can couple that with the more recent over the last two years demand, the market has been tougher. Now having said that, we believe that two things are happening.
One of which is demand is getting better and we'll get better from here. And secondly, we believe that there will be further industry consolidation. Let me give you an example. Over the last few months, it was announced that two leading scaled manufacturers of LED products in China I'm sorry, in Taiwan, Epistar and Lexstar, are merging. And we think that there's further opportunity for industry consolidation that will again be a positive impact on the supply base.
More to come there. Finally, as far as future growth and opportunities for Cree, Cree focuses on specialty markets, things that encapsulate smart lighting systems, IoT, environmental and safety, all catalysts for growth. And they're a differentiated performance company, and that's what's going to allow us to focus on those new catalysts for future growth.
Okay. If I can maybe squeeze in one last one. Chris has talked
I'm about sorry. By the way, Sidney, I'm sorry. Sorry to interrupt. I didn't talk about the JV, which is really important. And before I do that, let me just also emphasize.
As part of this transaction, we are not getting any of the manufacturing assets of the parent. So today, we have a supply relationship with CRE. And as you know, Cree is a pioneer in silicon carbide technology. But for the LED business, a few years back, there was a beginning of a transformation from silicon carbide to sapphire within Cree. And that transition is in motion and well on its way.
But beyond that, there's a second transition, and that is from a captive manufacturer to an outsourced manufacturing model, think of it in terms of a foundry like model, with a leading manufacturer for low cost technology. And the combination of those will help us drive, with our excellence around manufacturing from SMART, extensive margin expansion. Now as it relates to Sanon, it's a company I know very well. I know Simon, he already texted me. We will take very strategic advantage of that joint venture because I think that growth in the type of technologies that they bring to market through the form of the JV will allow us to be a scale player beyond our current high power, high performance capacity through the outsourced manufacturing partner.
The combination of that will give us an industry leading portfolio at the lowest possible cost.
Great. Thanks for that clarification. Well, I guess it's related that Cree has talked about getting gross margin in the mid-thirty percent the longer term from where they are today. Is that something you guys also believe that that's going to happen?
Well, let me just say this. We're not going to forecast actual gross margin numbers, but we are very confident in our cost position to know that a major part of the opportunity here is how we execute the SMART operating system, working with the Cree technology and the Cree leadership team to drive this transformation. And with that, I think the Cree team will be able to execute and drive significant margin expansions in the areas you're talking about.
Great. Thank you very much. Congrats again.
Thanks, Sydney.
Thank you. And our next question comes from the line of Kevin Cassidy with Rosenblatt Securities. Your line is now open.
Yes. Thank you for taking my question and congratulations on this deal. But first, Jack, just to be clear, on your first year targets, that's just pure CRE upside? Doesn't include any organic growth within SMART?
No, there would be some. This is kind of a pro form a with SMART and CRE together, it's not all CRE.
Okay, thanks. For the expansion of the sales team into Asia, how does that work? Are you going to be able to have those salespeople now sell your embedded products and other SGH core products? How does those synergies work out there?
Sure. Well, sales synergies we referred to were more around potential channel partnerships than actual sales overhead. One of the benefits of this business is the design win nature from a sales and field application engineering infrastructure. And so that is a competitive advantage that Crete brings to the table. It is not something that we're looking to necessarily reduce or synergize.
We're looking to empower them to grow into new application areas.
Okay, great. Well, there's 2,000 employees currently at Cree. That does not include the manufacturing?
It does not include the outsourced manufacturing, but it does include roughly 1,600 employees in a packaging test and assembly facility in Suzhou, China.
Okay, great. Thank you.
Thank you.
Thank you. And our next question comes from the line of Raji Gill with Needham and Company. Your line is now open.
Yes, thank you. And I echo my congratulations on the acquisition and the diversification strategy. A question on the overall revenue that's being brought to the table. So $433,000,000 of sales. Could you, Mark, give us a sense in terms of the customer distribution, the geographic distribution of those sales?
Are there any concentrated customers that are above 10%? Just want to get a flavor of that mix of revenue.
Let me start and then I'm going to ask Claude Denby, who's in the room with me. Claude is the current leader of that business and will be the President of Cree Lighting sorry, Cree LED. Let me start, and then I'll pass it to him. The number $433,000,000 revenue is a prior year revenue number. And as part of what we're talking about today in our operating system, as part of that, we're going to do what any new company would do, to take a look at all lines of businesses and make sure that those businesses are generating the right return.
And so as we think about this business, we do see this as a growth business. But we're initially going to work with Claude and his team to go identify what are the big bets we need to make and what are the businesses potentially that we don't want to take with us. And in that exercise, under Claude's leadership, I think we'll be able to drive, as I said, probably mid digit, single digit growth. But let me now turn to Claude and ask him to give you a little bit more color on the customer diversity and diversification in
the end markets. Good morning, everyone, and thanks for your time. So from a Cree LED perspective, we have over 5,000 customers globally that we service through both our direct sales channel and through our channel with our distributor partners across the world. We sell about 60% of our sales go through the sales channel with our distributor partner, and the balance of the sales go through our direct channel. And they're globally dispersed across our industry where you see about 50% of our sales coming from the Asia region and then 25% of our sales equally distributed in The Americas and in Europe.
From a customer perspective, there is not what we have. All of our customers are important to us. We don't have any customer concentration issues. There's not one customer that has more than 5% of our overall business on an annual basis, would be the largest. So we view that our customer diversity, our channels to the market, both through direct and our distributor partnerships, puts us in a great position to have global reach to expand and continue to grow our business.
Yes. Thank you for that. And just for my follow-up, Mark, you had mentioned the overall market was characterized by excess capacity that was brought upon by the Chinese manufacturers. Do you think that we're at the bottom in terms of that excess capacity, that we've cleared that excess capacity in the industry? And you're anticipating further industry consolidation.
Is that going to help overall supply as well? So you're kind of hoping that not only will these Chinese OEMs are done with flooding the market with LED, but the consolidation will further tighten up supply and help the demand supply balance?
Thanks for the question. What I would say is I think it's in process. I'm not going to declare that the excess capacity is all gone. As a matter of fact, though, that's what leads credence to our operating platform. This transformation to an outsourced model through a foundry relationship with a Taiwan manufacturing partner.
By the way, that's been ongoing. That is not a new concept. That's been ongoing. This transformation for us is massive because it's taking advantage of this excess capacity. And the joint venture we have with Sanon is very similar.
I believe, as far as the competitors that we see in the marketplace and the segments we serve, we will be the lowest cost provider of that technology. And I do think that industry structure has to occur in order for us to get to the world you're trying to paint, which is one that's more rationally balanced between supply and demand.
Thank you.
Thank you.
And our next question comes from the line of Mark Lipakis with Jefferies. Your line is now open.
Hi, thanks for taking my question. Mark, I guess the I had three questions actually. Maybe the first one for Mark. Mark, Could you just review the kind of the overall arching M and A strategic rationale on this acquisition and how it kind of ties to the other ones? And then I think for maybe it's Mark and Claude together, as you're shifting to the FabLite model, silicon carbide to sapphire, where is the competitive advantage on the technology side or the cost side?
Is it on the back end? And then a question for Jack, how does this impact the CapEx model for SMART going forward? That's all I have.
Thank you.
So let me start, and I'll address the strategic alignment. I think that's what you're asking first. I'll pass it to Claude to talk about the benefits of the Saphyr transition and through the outsourced model. And then Jack can follow-up on the CapEx implications to our business. Is that okay?
That's great. Thank you.
Sure. Well, what we're trying to stress here is something that we've already done. When you look at our recent history in terms of inorganic scaled growth, we've deployed a set of criteria as we look at
new
opportunities. First, we look at companies which have the potential to perform better, companies that have great core technology or capabilities. And then they have the ability, through the support of our operating system, to actually perform better than they are where they sit today. And that is definitely the case at Cree. I've known the CEO of Cree, Greg Lowe, very well for a long time.
His pivot to Wolfspeed and power has obviously been very successful and very good return for the shareholders. Having said that, Cree's business was built from LED technology since 1987. And obviously with the trade offs from a capacity standpoint, from a resource and investment, something had to give. And Cree, on the LED side, was challenged to get the mindset that was being given to Wolfspeed. I certainly understand the investment rationale, but we think there's untapped potential here at Cree LED.
Second, we evaluate opportunities where our smart operating system will benefit. This manufacturing transformation is on its path. We think, given the world we operate in, in terms of memory, HPC, embedded in wireless computing, we believe our expertise will be of great benefit to ensure timeliness of schedule and execution. Second, we've talked about this. Cree is focused on specialty markets, niches.
That's what we do at Smart Global Holdings. We're a specialty company, specialty memory, high performance compute, and specialty vertical applications, and embedded IoT and wireless. Third, it's this ruthless management of operating costs. We have an efficient operating culture. We compete in tough businesses, and our mindset is about driving the lowest possible cost to do business in operating and driving the most profitability.
Fourth, we're required to manage global scaled technology differentiated customers. Every quarter, we show you the customer list that spans all of SMART Global Holdings, leaders from many different industries, Companies like Facebook, Shell Oil, Cisco, Lockheed, the list goes on and on. Our customers value the partnership that SMART provides high quality products on time delivered to their specifications. I can't think of a better fit in the LED world than Cree. And finally, our available shared services synergies coming from categories like IT, finance, HR, legal, and channel help drive further costs.
Now let me move on to what we look for in the opportunities. That is, where we are looking at companies, we look at the leadership team and their teams and how they will fit into the culture of SMART. As I mentioned, I've known Claude for a while. As a matter of fact, this is my second round of due diligence I've done with Cree. The team is passionate about their business.
They love the technology. And they have a bit of a chip on their shoulders to go execute. They have a history of differentiation driving in the specialty application centered markets. And they have a history of innovation. Fourth, the specialty factor, niche solutions where large OEMs don't focus and they're not nimble enough to compete.
That's what we do well. We focus on design in businesses, design, as I said earlier, field sales and application capabilities at the point of the customers. And that type of business, that drives ongoing and repetitive revenue streams. Differentiation on opportunities exist as we think about how to take our core technology and make it fit for verticals. And the customer engagement is highly collaborative.
One other point I'd like to make as we look at companies is how does it advance the broader portfolio of technology at SMART? And when you think about our past, starting out in logistics and module manufacturing, With the benefit of high performance computing through the acquisition of Penguin, we're offering enterprise solutions. And you think about IoT based embedded applications coming from the Artisan application and In Force. Today, we're advancing even more. Today, we're moving up the stack further as a chip manufacturer and as a system integrated product solution aimed at vertical markets.
And we will continue to see that going forward. And the final criteria as I look at acquisitions in the light of SMART Global Holdings going forward is it has to offer accretive returns for SMART to compete. So we look at the ability to invest in these type of companies to return great accretive results in terms of EPS, EBITDA margin, cash, ROIC and other metrics. And if we're doing this correctly, we continue to scale through diversification and reinvest back in the business. So I hope that helped with the strategy alignment and how CRE fit into our model.
And now I'd like to turn it over to Claude to talk about a little bit of the Saphyr transition and of course the outsourced model transition.
So Cree has been active for a while, as Mark alluded to, thirty years of innovation. And one of the things that we started out when we innovated in the LED space was we started out on the silicon carbide platform. And as many of you know, the cost profile of the silicon carbide platform was cost disadvantage relative to the other competitive positions out in the marketplace. But the performance was phenomenal. So it enabled us to create a leadership position in the high power general lighting space.
There was no doubt about that. But back about three or four years ago, our scientists started to be were challenged. We challenged our scientists to go out and say, how can we drive greater performance than silicon carbide on a more cost advantaged platform to sapphire? And so we did that. Our scientists had tremendous breakthroughs where now we have the technology that provides game changing kinds of performance off of a cost advantage platform.
So the first piece is transitioning from silicon carbide to sapphire within the Cree location fabs here enable us to drive cost out. But then what it more positioned us to do was to absolutely go out and use worldwide existing capacity infrastructure to to drive our overall cost for actually manufacturing the chips outside of our four walls. And what that did was not only caused another step down in terms of the cost profile for our product, but it also enabled us to engage a CapEx light model. Not So only do we drive gross margins and EBITDA, but we drive gross free cash flows over this forecast horizon. So you can see I'm really excited about this transition.
Not only that, but it creates a more resilient manufacturing base. So now when we go out with this better cost footprint that enables us to deliver a greater differentiated value proposition to our customers, we'll also be able to grow more quickly, more nimbly, and more flexibly. So I I think that's the exciting piece. And then the piece that really found that is with respect to our r and d talent and engineers. As Mark told you about the number of engineers that are gonna come in with the deal, they will continue to work with our supply partners around the world on our intellectual property and on our technology to continue to push the performance and cost envelope so that in the marketplace, we remain the leader, not only from a technology standpoint, but from a cost footprint standpoint.
So we're pretty excited about it.
Okay, great. Let me ask Jack to comment on
the CapEx question. Yes, sure. Hey, Mark. As we've talked about, we run a CapEx light model with our operating efficiency. So since we're only going to really be taken on the back end and of this business and the back end is not that capital intensive, I mean, maybe our CapEx spend is going go somewhere between 5,000,000 to $10,000,000 a year for this business, but it's going to be a very light CapEx as well, just to model all the other smart businesses that we have, Mark.
was very helpful.
Thank you.
Thank you. We have time for one more question.
Thank you. I'm not showing any further questions on the phone line. I'd like to come again back to soon
I'm sorry. Maybe I'll just take it I just wanted to thank everybody for coming together on short notice. This is a transformational day for SMART Global Holdings, and we're excited to welcome the Creed team members. And again, thank you for joining on such short notice, have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank Thank you for participating. You may now disconnect.