Arrowhead Research Corporation (Nasdaq:ARWR) announced that the Company has agreed to increase its ownership in its majority-owned subsidiary Unidym, Inc. through a stock exchange ("the Agreement") with certain holders of Unidym's Series A Preferred Stock. Each share of Unidym Series A Preferred Stock is convertible into 1.68 shares of Unidym common stock. Unidym is a market leader in high value carbon nanotube (CNT) production and applications, with a near-term focus on displays.
Under the Agreement, Arrowhead is exchanging an aggregate of 1,564,610 restricted shares of Arrowhead common stock for an aggregate of 1,564,610 shares of Unidym Series A Preferred Stock with the holders. The Agreement provides for a one-year lock up on sales of the exchanged Arrowhead stock. As a result of the Agreement, Arrowhead's ownership in Unidym will increase to 58.1% from 51.5%.
"We see Unidym as an important value generator for Arrowhead going forward, and this transaction enables us to increase our upside potential without expending cash," stated Dr. Christopher Anzalone, Arrowhead's President and CEO. "We were pleased with Unidym's progress last year in commercial sales of its high-end, proprietary CNT materials and its establishment of strategic partnerships and joint development agreements with major LCD and touch panel manufacturers. Unidym's technology has the potential to be a disruptive force in the electronics industry, with near-term opportunities in the substantial touch-screen and LCD markets, and longer term, via additional applications in such diverse industries as solar energy and printable electronics. We look forward to increased participation in Unidym's future success."