Transaction marks another milestone in Penguin’s transformation into a pure-play data center AI infrastructure solutions company
FREMONT, Calif.–(BUSINESS WIRE)–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.
Shaikh added, “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.”
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.
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/.
