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New wave of ATE consolidation emerges

Posted: 04 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:automated test equipment? semiconductor IC?

Teradyne Inc. has signed an agreement to buyout fellow IC automated test equipment (ATE) vendor Eagle Test Systems Inc. for approximately $250 million in cash.

The deal, which will still be subjected to the common closing conditions like the approval of Eagle Test shareholders, represents the ongoing wave of consolidation in the environment of the troubled ATE industry.

Under the agreement, the Eagle Test shareholders will get $15.65 per share in cash, which can be summed up of roughly $365 million, according to Teradyne. "The aggregate purchase price is expected to be around $250 million, net of $115 million in cash that Eagle holds, which will be acquired along with the company, and includes the fair value of fully vested employee equity instruments," said Teradyne.

Expected merger
The long-awaited wave of ATE vendor consolidation began early this year when Verigy Inc., the ATE spin-off of Agilent Technologies Inc., closed the acquisition of DFM chip test vendor Inovys on Jan. 7. Two weeks later, Teradyne closed the $325-million acquisition of Nextest Systems Corp.

Credence Systems Corp. in June got into a final agreement to sell its automotive ATE unit in Amerang, Germany to Japan's Advantest Corp. for $5 million. Last month, ATE rivals Credence and LTX Corp. completed their all-stock merger of equals. The Eagle acquisition would seem to bolster Teradyne's product portfolio. Its strength is in SoC ATE, while Eagle Test's products deals with analog, mixed-signal and RF test.

"Eagle Test has a solid franchise in power management and other analog-dominant IC test applications, which will complement the SoC test solutions provided by our FLEX and J750 test systems," said Mike Bradley, president and CEO, Teradyne. "We plan to put the full weight of our global distribution organization behind Eagle Test's ETS product line so customers can benefit from this very cost-effective test platform," he added.

"The acquisition is expected to close in Q4 08," the companies said. Then, the Eagle Test will be run as a business unit within Teradyne's semiconductor test division.

- Dylan McGrath
EE Times Europe

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