Penguin Solutions to sell Cree LED to Transom Capital
Penguin President and CEO Kash Shaikh said net sales grew 58% year over year in the second half of fiscal 2026.
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Form Type
8-K
Rhea-AI Filing Summary
Penguin Solutions, Inc. agreed to sell its Cree LED business, which comprises its Optimized LED segment, to Transom Capital Group in an all-cash transaction. Under the agreement, Transom’s affiliate Transom Crystal AcquireCo, LLC will acquire all outstanding equity of Cayman DRE Holdco, an indirect wholly owned subsidiary of Penguin. Penguin’s board approved the transaction, which is expected to close in the first calendar quarter of 2027, subject to customary closing conditions.
Penguin reaffirmed its fiscal 2027 outlook, which includes a full year of expected Cree LED results. Cree LED represents approximately 10% of projected fiscal 2027 net sales. Penguin expects to update its outlook after closing to reflect the divestiture and related financial impacts; the company said the transaction does not change its underlying expectations for growth and demand in AI infrastructure and memory.
At closing, Joseph Clark, President of Optimized LED, will cease to be an executive officer of Penguin and is expected to remain employed by the business following the transaction. Penguin said the sale will align its portfolio, resources and capital allocation priorities with opportunities in data center AI infrastructure and memory.
Filing Explained
Penguin has agreed to sell Cree LED for cash, but the filing does not state the purchase-price amount, leaving the transaction’s value unquantified here; closing is expected in the first quarter of 2027, subject to customary conditions.
8-K Event Classification
4 items: 5.02, 7.01, 8.01, 9.01
4 items
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net sales growth: 58% year over year
Cree LED share of projected net sales: Approximately 10%
Expected transaction closing: First calendar quarter of 2027
+1 more
4 metrics
Net sales growth
58% year over year
Second half of fiscal 2026, as stated by Penguin’s President and CEO
Cree LED share of projected net sales
Approximately 10%
Penguin’s projected fiscal 2027 net sales
Expected transaction closing
First calendar quarter of 2027
Subject to satisfaction of customary closing conditions
Cree LED innovation history
More than 35 years
Cree LED company description
Key Terms
all-cash transaction, customary closing conditions, divestiture, Full-Stack AI Factory Platform
4 terms
all-cash transaction financial
"Cree LED in an all-cash transaction"
An all-cash transaction is a deal where the full purchase price is paid immediately in cash or cash equivalents, rather than through financing or installment payments. For investors, this type of transaction often indicates a quick, straightforward sale and can signal confidence from the buyer, potentially affecting the value and perception of the involved assets.
customary closing conditions regulatory
"subject to the satisfaction of customary closing conditions"
"Customary closing conditions" are standard rules or checks that must be met before a business deal can be finalized, like making sure all paperwork is in order or that certain approvals are obtained. They matter because they help protect both parties, ensuring everything is in place and reducing the risk of surprises or problems after the deal is closed.
divestiture financial
"The planned divestiture reflects Penguin Solutions’ commitment"
Divestiture is the process of selling or getting rid of a part of a company, such as a division or asset. It often happens when a business wants to focus on its core activities or improve its finances. For investors, divestitures can signal strategic shifts or influence the company's value, affecting investment decisions.
Full-Stack AI Factory Platform technical
"This sharpened focus will advance the Company’s Full-Stack AI Factory Platform strategy"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What is Penguin Solutions (PENG) selling to Transom?
Penguin agreed to sell Cree LED, which comprises its Optimized LED segment, through the sale of all outstanding equity of Cayman DRE Holdco to Transom’s affiliate Transom Crystal AcquireCo, LLC. The agreement provides for an all-cash transaction.
When is the PENG Cree LED sale expected to close?
Closing is expected in the first calendar quarter of 2027, subject to satisfaction of customary closing conditions. Penguin’s board approved the transaction.
How much of Penguin’s projected fiscal 2027 sales comes from Cree LED?
Cree LED represents approximately 10% of Penguin’s projected fiscal 2027 net sales. The reaffirmed outlook includes a full year of expected results from Cree LED.
Why does Penguin Solutions plan to sell Cree LED?
Penguin said the sale will align its portfolio, resources and capital allocation priorities with opportunities in data center AI infrastructure and memory. The company also described the divestiture as part of its transformation into a data center-focused company.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 3, 2026
(Exact name of registrant as specified in its charter)
Commission File Number 001-38102
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
Registrant’s Telephone Number, Including Area Code: (510 ) 623-1231
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the Transaction (as defined below) described under Item 8.01 below, Joseph Clark, President of Optimized LED, will cease to serve as an executive officer of Penguin Solutions, Inc., a Delaware corporation (the “Company”), effective upon the closing of the Transaction. Mr. Clark is employed by the Business (as defined below), which Buyer (as defined below) will acquire as part of the Transaction, and he is expected to continue his employment with the Business following the closing of the Transaction.
Item 7.01 Regulation FD Disclosure.
On November 4, 2026, the Company issued a press release announcing the entry into the Purchase Agreement (as defined below) described under Item 8.01 below and reaffirming its previously issued financial outlook for full-year fiscal 2027, as provided in its earnings release issued on October 6, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On November 3, 2026, the Company and SMART Modular Technologies (DH), Inc., an exempted company incorporated in the Cayman Islands and an indirect wholly owned subsidiary of the Company (the “Cayman Seller”), entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Transom Crystal AcquireCo, LLC, a Delaware limited liability company (“Buyer”), an affiliate of Transom Capital Group, LLC, pursuant to which the Company agreed to sell its Cree LED business, which comprises its Optimized LED segment (the “Business”), to Buyer through the sale by the Cayman Seller of all of the outstanding equity of Cayman DRE Holdco, an indirect wholly owned subsidiary of the Company (the “Transaction”). The Company discusses its Optimized LED segment in its periodic reports.
The Transaction, which was approved by the Company’s Board of Directors, is expected to close in the first calendar quarter of 2027, subject to the satisfaction of customary closing conditions.
Pursuant to the Purchase Agreement, the Buyer will acquire the Business in an all-cash transaction. The Purchase Agreement also contains customary termination rights.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995 that are not historical in nature, that are predictive or that depend upon or refer to future events or conditions. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements. These statements may include, but are not limited to, statements concerning the proposed sale of the Business; the expected timing of the closing of the Transaction and the satisfaction of closing conditions; the Company’s financial outlook for full-year fiscal 2027; and Mr. Clark’s expected transition and continued employment with the Business under Buyer. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “believe,” “could,” “will,” “may” and other words of similar meaning. These forward-looking statements are based on current expectations, circumstances, aspirations and assumptions that are subject to factors and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. These forward-looking statements are subject to a number of significant risks, uncertainties and other factors, many of which are outside the Company’s control, including the risk that the Transaction may not be completed in a timely manner or at all, the failure of the parties to satisfy the conditions to the closing of the Transaction, and the factors and risks detailed in the Company’s filings with the Securities and Exchange Commission (which include the Company’s most recent Annual Report on Form 10-K). Such factors and risks as outlined above and in such filings do not constitute all factors and risks that could cause actual results of the Company to be materially different from the Company’s forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this Current Report on Form 8-K, and the Company does not intend, and has no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Current Report on Form 8-K, except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | ||||
| 99.1* | Press release issued on November 4, 2026 | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
* Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 4, 2026 | Penguin Solutions, Inc. | |||||||
| By: | /s/ Anne Kuykendall | |||||||
| Anne Kuykendall | ||||||||
| Senior Vice President and Chief Legal Officer | ||||||||
Exhibit 99.1
 | |||||
Penguin Solutions Announces Agreement to Sell Cree LED to Transom Capital Group
Transaction marks another milestone in Penguin's transformation into a pure-play data center AI infrastructure solutions company
FREMONT, Calif. - November 4, 2026 - Penguin Solutions, Inc. (“Penguin Solutions,” “Penguin,” or the “Company”) (Nasdaq: PENG), the AI Factory Platform Company, today announced that it has entered into a definitive agreement to sell its Cree LED business ("Cree LED") to Transom Capital Group (“Transom”), a leading operations-focused middle-market private equity firm.
The planned divestiture reflects Penguin Solutions’ commitment to creating long-term shareholder value. It will further align the Company’s portfolio, resources, and capital allocation priorities with the significant growth opportunities it sees in data center AI infrastructure and memory.
This sharpened focus will advance the Company’s Full-Stack AI Factory Platform strategy, which combines differentiated infrastructure software, advanced memory, compute systems, and end-to-end services designed to help customers accelerate deployment, optimize token economics, and maximize returns on their AI investments.
The transaction will position Cree LED as a standalone LED business under Transom's ownership, enabling it to build on its longstanding history of innovation, customer relationships, and differentiated LED technologies across lighting, displays, and specialty applications.
“Today’s announcement marks another milestone in Penguin Solutions’ transformation into a pure-play, data center-focused company at the intersection of AI infrastructure and memory. Since launching our AI Factory Platform earlier this year, we have accelerated our financial performance, delivering 58% year-over-year net sales growth in the second half of fiscal 2026, with earnings growing substantially faster than revenue, and provided a strong fiscal 2027 growth outlook,” said Kash Shaikh, President and CEO of Penguin Solutions.
“The Cree LED divestiture further demonstrates our disciplined execution, allowing us to concentrate on the significant growth opportunities we see in AI data centers. We believe it positions us for sustained profitable growth. We’re proud of the Cree LED team and believe Transom is well positioned to support its continued innovation and success.”
“Cree LED has an impressive legacy of innovation and an established reputation in the LED industry for high-quality products, reliable performance and longstanding customer relationships worldwide,” said Conor Davenport, Managing Director at Transom. “We see significant opportunity to build on this foundation, leveraging our operational expertise and resources to position Cree LED for long-term success as a standalone company. We look forward to partnering with the Cree LED team as the business enters this next chapter.”
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Under the terms of the definitive agreement, Transom will acquire Cree LED in an all-cash transaction. The transaction is expected to close in the first calendar quarter of 2027, subject to the satisfaction of customary closing conditions.
Lazard Freres & Co. LLC is serving as financial advisor to Penguin Solutions, and Latham & Watkins LLP is serving as legal counsel. Kirkland & Ellis LLP is serving as legal counsel to Transom.
Reaffirms Fiscal 2027 Outlook
Penguin Solutions reaffirms its previously issued fiscal 2027 financial outlook, as provided in its October 6, 2026, earnings release.
The outlook includes a full year of expected results from Cree LED, which represent approximately 10% of the Company’s total projected fiscal 2027 net sales. The Company expects to update its outlook following the transaction’s closing, which is anticipated in the first calendar quarter of 2027, to reflect the divestiture and related financial impacts.
The transaction does not change the Company's underlying expectations for growth and demand across its AI infrastructure and memory businesses.
Use of Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that are not historical in nature, that are predictive or that depend upon or refer to future events or conditions. These statements may include, but are not limited to, statements concerning or regarding the proposed sale of the Cree LED business; the expected timing of the closing of the transaction and the satisfaction of closing conditions; the anticipated benefits of the transaction to Penguin Solutions and Cree LED, including the ability of Penguin Solutions to sharpen its strategic focus, align its portfolio, resources and capital allocation priorities, and prioritize investment in its AI Factory Platform; the Company's financial outlook for full-year fiscal 2027, including statements regarding the estimated contribution of the Cree LED business to projected full-year net sales and the expectation to update the Company's financial outlook following the closing of the transaction; statements regarding long-term growth opportunities and demand in data center AI infrastructure and memory solutions, the Company’s ability to achieve sustained profitable growth, and long-term shareholder value creation; statements regarding the expected capabilities and benefits of Penguin Solutions’ products and services for its customers, including the ability to accelerate deployment, optimize token economics and maximize the return on AI investments; statements regarding Cree LED's future operations, innovation, customer relationships and long-term success as a standalone company under new ownership; and
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statements regarding the expected impact of the transaction on Penguin Solutions' business strategy and portfolio.
These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipate," "target," "expect," "estimate," "intend," "plan," "goal," "believe," "could," "will," "positioned," "opportunity" and other words of similar meaning. Forward-looking statements provide the Company’s current expectations or forecasts of future events, circumstances, results or aspirations and are subject to a number of significant risks, uncertainties and other factors, many of which are outside of the Company’s control, including but not limited to: the risk that the transaction may not be completed in a timely manner or at all; the failure of the parties to satisfy the conditions to the closing of the transaction; unexpected costs, charges or expenses resulting from the transaction; the effect of the announcement or pendency of the transaction on business relationships, operating results and the business generally; risks related to the separation of the Cree LED business, including disruption of management’s attention from ongoing business operations; the risk that the anticipated benefits of the transaction may not be realized or may take longer to realize than expected; global business and economic conditions, including the impact on the financial condition of the Company’s customers, particularly in challenging macroeconomic environments; growth and demand trends in technology industries (including trends and markets related to artificial intelligence), the Company’s customer markets and various geographic regions; uncertainties in the geopolitical environment, including those related to global conflicts and the global effects thereof on international relations, transport and trade; changes in trade regulations and tariffs or adverse developments in international trade relations and agreements; the Company’s ability to manage the Company’s cost structure; disruptions in the Company’s operations or supply chain; the success of the Company’s strategic initiatives; and the continuing availability of borrowings under revolving lines of credit or other debt arrangements and the Company’s ability to raise capital through debt or equity financings.
These and other risks, uncertainties and factors are described in greater detail under the sections titled "Risk Factors," "Critical Accounting Estimates," "Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and "Liquidity and Capital Resources" contained in the Annual Report on Form 10-K for the fiscal year ended August 28, 2026, as updated by the risk factors, if any, contained in the Company’s Quarterly Reports on Form 10-Q and in the Company’s other filings with the U.S. Securities and Exchange Commission (the "SEC"). Such risks, uncertainties and factors as outlined above and in such filings could cause the Company’s actual results to be materially different from such forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statements that the Company makes in this press release speak only as of the date of this press release. Except as required by law, the Company does not undertake to update the forward-looking statements contained in this press release to reflect the impact of circumstances or events that may arise after the date that the forward-looking statements were made.
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About Penguin Solutions
Penguin Solutions is the AI Factory Platform Company. We design, build, and manage next-generation data centers for enterprises, sovereign AI initiatives, and neocloud providers.
With deep design expertise at the intersection of data center AI infrastructure and memory solutions, our Full-Stack AI Factory Platform combines differentiated infrastructure software, advanced memory, compute systems, end-to-end services, and industry-leading partner technologies to help customers accelerate deployment, optimize token economics, and maximize the return on their AI investments.
Learn more at PenguinSolutions.com.
About Cree LED
Cree LED offers one of the industry’s broadest portfolios of application-optimized LED chips and components, leading the industry in performance and reliability. With more than 35 years of innovation, its strong IP portfolio and unique business model are designed to support supply chain continuity. Cree LED delivers best-in-class technology and breakthrough solutions for focused applications in high-power and mid-power general lighting, portable lighting, horticulture, specialty lighting and video screens. For more information, visit cree-led.com.
About Transom Capital Group
Transom is a leading operationally focused private equity firm that thrives in complexity, specializing in identifying and unlocking value in the middle market. Founded in 2008 and headquartered in Los Angeles, Transom has established a strong track record across various economic cycles by employing a time-tested, operationally intensive strategy to drive transformative outcomes. Transom’s expertise spans corporate carve-outs, lender-owned businesses, and other complex situations requiring speed, flexibility, and precision. Supported by a large in-house operations team, Transom delivers tailored solutions backed with functional expertise to help companies unlock their full potential.
Transom’s sector-flexible approach is grounded in pattern recognition, value creation, and disciplined execution. The firm provides not only capital, but also the tools, insights, and operational capabilities necessary to accelerate business performance and create long-term value. For more information, visit www.transomcap.com/.
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Contacts
Melissa Sanders, Marketing Communications Specialist, Cree LED
Melissa.sanders@cree-led.com
Lerin O'Neill, Sr. Director, Corporate Communications and PR, Penguin Solutions
Lerin.oneill@penguinsolutions.com
Prosek Partners, Media Contact for Transom Capital Group
pro-transom@prosek.com
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