Computer peripherals producer Universal Display Corp. (OLED) recently augmented its strategic relationship with LG Display Co., Ltd. (LPL) by forging a new OLED (organic light-emitting diode) Technology License Agreement and Supplemental Material Purchase Agreement that runs through Dec 31, 2022. With the deal, share prices of Universal Display were up 6.8% to close at $30.13 as of Jan 26, 2015.
Under the terms of the agreement, LG Display will obtain non-exclusive license rights from Universal Display for its various patented products to enable it to manufacture and sell various OLED display products on its own. On return, LG Display will pay license fees and royalties over the term of the agreement. In addition, Universal Display will be able to generate incremental revenues from the sale of phosphorescent materials to LG Display for use in its licensed products.
The transaction is a win-win deal for both the companies. While Universal Display will be able to churn significant revenue from its licensed products and gain additional publicity for future use by other technology firms, LG Display will be able to accelerate its OLED product development to offer differentiated products to its customers. This is particularly significant as customers have been currently favoring OLED TVs of 4K models ranging from 55”, 65” and 77” in flexible, curved and flat form factors.
Universal Display offers state-of-the-art OLED technologies, materials and services and currently owns or has exclusive, co-exclusive or sole license rights of over 3,300 issued and pending patents worldwide. The company licenses its proprietary technologies for the development of low-power and eco-friendly displays and lighting solutions. Universal Display also provides customized solutions to its clients through technology collaboration and on-site training.
Universal Display presently has a Zacks Rank #3 (Hold). Other better-ranked companies in the industry include Active Power Inc. (ACPW) and KEMET Corp. (KEM), both carrying a Zacks Rank #2 (Buy).
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