Blog Exposure – Cohu to Acquire Xcerra to Form One of the Largest Semiconductor Testing Companies in the World

LONDON, UK / ACCESSWIRE / May 10, 2018 / If you want access to our free research report on Cohu, Inc. (NASDAQ: COHU), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=COHU as the Company’s latest news hit the wire. On May 08, 2018, the Company announced that it has entered into an agreement to acquire Xcerra Corp. (NASDAQ: XCRA). The cash plus stock deal has an equity value of approximately $796 million and an enterprise value of approximately $627 million. The deal is expected to create one of the largest semiconductor testing Companies in the world. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Cohu and Xcerra most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

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Details of the Deal

As per the terms of the agreement, Cohu has agreed to pay Xcerra’s shareholders $9 in cash and 0.2109 Cohu share for each Xcerra share. The deal values Xcerra at $13.92 per share, which translates to an equity value of approximately $796 million and an enterprise value of approximately $627 million. The offer is at an 8.4% premium to the closing price of Xcerra shares on May 07, 2018, the last day of trading before the deal was announced.

The deal has been approved by the Board of Directors of both Cohu and Xcerra. The transaction is expected to close in H2 2018, subject to regulatory and shareholders’ approvals and other closing conditions. Cohu plans to finance the cash portion of the deal with available cash in hand and fresh debt of approximately $350 million.

Once the deal is completed, Xcerra’s shareholders will own approximately 30% of the merged Company. The management of the merged Company will be led by Luis Müller, Cohu’s current President and Chief Executive Officer (CEO). Müllerwill continue to serve in his roles, while Jeff Jones will continue as the Vice President of Finance and Chief Financial Officer (CFO). Once the deal is completed, the Board of Directors of the merged Company will expand to include two directors from Xcerra’s board.

Benefits of the Acquisition

The merger of Cohu and Xcerra is expected to create a global leader in the semiconductor test industry, with the combined sales of both Companies exceeding $800 million and non-GAAP operating income of approximately $124 million in the last twelve months.

The deal is expected to be immediately accretive to Cohu’s earnings per share (EPS) on a non-GAAP basis, and is expected to realize $20 million in annual run-rate cost synergies within two years of completing the deal.

The merged Company is expected to have a diversified revenue base and expanded market of $5 billion.

The merged business is expected to expand its footprint into high growth end-markets of automotive, IoT, industrial, and mobility.

Management Comments

Commenting on the acquisition of Xcerra, Müller said:

“This proposed acquisition is a powerful combination of two complementary Companies that will accelerate our strategy to diversify our product offerings and strengthen Cohu’s position as a global leader in back-end semiconductor equipment. The depth and breadth of the combined product portfolios, engineering, and product development resources, as well as the global customer support platforms will enable us to deliver comprehensive semiconductor back-end solutions that better meet the future needs of our customers.”

David Tacelli, President and CEO of Xcerra, added:

“We are very pleased to be joining forces with Cohu to create a global leader in back-end semiconductor test. Together, we will be an even stronger and more competitive Company with far reaching long-term benefits to our customers and employees.”

Backdrop

Xcerra had earlier entered into an agreement in April 2017 to merge with China’s Unic Capital and affiliate of Sino IC Capital, a Chinese fund focusing on investments in semiconductor and related industries. Hubei Xinyan Equity Investment Partnership (“Xinyan”) was formed by Unic to acquire Xcerra and the deal was approved by Xcerra’s shareholders in October 2017. Xinyan had agreed to pay $10.25 for each Xcerra share. However, the Committee on Foreign Investment in the United States (CFIUS) did not approve the transaction. CIFUS had blocked the deal on potential national security concerns following which Xcerra and Xinyan called off their merger in February 2018.

About Xcerra Corp.

Norwood, Massachusetts-based Xcerra is the parent Company of four powerful brands in the semiconductor and electronics manufacturing test markets: atg-Luther & Maelzer, Everett Charles Technologies, LTX-Credence, and Multitest. It offers a broad range of products and services to the semiconductor and printed circuit board test markets. It caters to the broad, divergent requirements of the mobility, industrial, automotive, and consumer end markets supported by a global network of strategically deployed applications and support resources.

About Cohu, Inc.

Founded in 1957, Poway, California-based Cohu is a global leader in test handling, thermal subsystems, package inspection, contactors, and MEMS test solutions used by the semiconductor industry. It has three business units, Delta Design, Rasco, and Ismeca. The Company offers the broadest portfolio of enabling technologies in the industry that can be integrated in any of its handler platforms to optimize semiconductor test and solve some of the most challenging customer requirements.

Stock Performance Snapshot

May 09, 2018 – At Wednesday’s closing bell, Cohu’s stock rose 4.02%, ending the trading session at $22.75.

Volume traded for the day: 1.02 million shares, which was above the 3-month average volume of 263.34 thousand shares.

Stock performance in the previous three-month period – up 7.06%; past twelve-month period – up 19.61%; and year-to-date – up 3.64%

After yesterday’s close, Cohu’s market cap was at $648.42 million.

Price to Earnings (P/E) ratio was at 14.51.

The stock has a dividend yield of 1.05%.

The stock is part of the Technology sector, categorized under the Semiconductor Equipment & Materials industry. This sector was up 1.2% at the end of the session.

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