Canyon Bridge Capital Partners has agreed to buy programmable chip company Lattice Semiconductor in a deal is worth nearly $1.3 billion.

China-backed Canyon Bridge is a newly formed private equity firm based in Palo Alto in California. The deal is subject to the approval of the Committee on Foreign Investment in the United States (CFIUS).

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The deal worth $1.3 billion, values Lattice's stock at $8.30 per share, a 30.3 percent premium over its Wednesday closing price of $6.37. The deal price also includes the debt assumed by Canyon Bridge.

Lattice Semiconductor is based in Portland, Oregon and specializes in programmable chips. These chips are used in autonomous cars among other uses.

Earlier this year, Reuters had reported that an unidentified Chinese buyer had shown interest in acquiring Lattice. Canyon Bridge's limited partners are mainly from China Reform Fund. Both parties expect the deal to be closed in early 2017. Apart from CFIUS approval, the deal also needs to obtain antitrust approval in China.

The deal may be strictly scrutinized by CFIUS. Earlier this year, a deal between Western Digital and Unisplendour fell apart after CFIUS proclaimed that it would need to review the transaction. The deal was worth $3.78 and amounted to a minor investment in the US company. Unisplendour is a unit of China's Tsinghua Unigroup.

Darin Billerbeck, CEO of Lattice Semiconductor, said that the deal with Canyon Bridge would remove the burden to operate as a public company, according to the Wall Street Journal. He noted that the company will now be able to make more technology investments. 

TagsCanyon Bridge Capital Partners, Lattice Semiconductor, Committee on Foreign Investment in the United States