Credence and LTX Sign Merger Agreement
MILPITAS, CA and NORWOOD, MA, June 22, 2008
Credence Systems (NASDAQ: CMOS) and LTX (NASDAQ: LTXX), both providers of ATE for the worldwide consumer semiconductor industry, have entered into a definitive agreement to combine the two companies in a tax-free, all-stock merger of equals.
Credence and LTX believe the combined strengths of the two companies will create a leading provider of focused, cost-optimized solutions designed to enable customers to implement best-in-class test strategies to maximize their profitability. The new company will address the broad, divergent test requirements of the wireless, computing, automotive, and entertainment market segments. It will offer a complementary portfolio of technologies, the largest installed base in the Asia-Pacific region, and a global network of strategically deployed applications and support resources.
Under the terms of the agreement, Lavi Lev, president and CEO of Credence, will become executive chairman of the combined company for a transitional period following the merger. David Tacelli, CEO and president of LTX, will become CEO and president; and Mark Gallenberger, CFO and vice president of LTX, will become CFO. Casey Eichler, senior vice president and CFO of Credence, will remain with the combined company through a transition period. The board of directors of the combined company will include five directors designated by LTX, including Tacelli, and four directors designated by Credence, including Lev.
"I am very excited about joining forces with LTX. This merger, from a technical and business point of view, represents the logical next step for both companies' long-term growth," said Lavi Lev, president and CEO of Credence. "We believe the combined strength of our technical expertise in RF, digital, mixed-signal and analog, coupled with a complementary product portfolio, will benefit our customers as they test and deploy high-volume, highly integrated devices into their respective market segments. From a business perspective, the merger broadens our customer base and provides a strong opportunity for growth."
"The technical and business challenges faced by our customers continue to intensify as time to market shrinks and margins are pressured by demands for new features at lower prices," noted David Tacelli, chief executive officer and president of LTX. "Now more than ever, it is vital we deliver cost-optimized test solutions focused on our customers' specific technologies, product mix, and device volume levels. We believe the timely merger of Credence and LTX enables us to build a test company with the financial strength, growth opportunities, critical mass, and operational efficiency to lead the industry as it faces these challenges."
"We expect the combination to drive efficiencies associated with operating a larger business, and we anticipate annual cost savings of approximately $25 million at the end of the integration period," noted Mark Gallenberger, CFO and vice president of LTX. "The transaction is expected to be accretive on a non-GAAP basis, excluding restructuring charges, within 12 months of combined operations and realization of the cost savings."
The merger is subject to approval by both companies' stockholders as well as the satisfaction of customary closing conditions and regulatory approvals. The boards of directors of both companies have unanimously approved the agreement and recommend their stockholders vote in favor of it. Pending regulatory approval, the companies expect the transaction to be completed by the end of September 2008.
About Credence
Credence Systems is a global provider of ATE to the high-growth, consumer semiconductor industry. An ISO 9001-certified company with a presence in 20 countries, Credence is headquartered in Milpitas, CA. More information is available at
www.credence.com.
About LTX
LTX supplies test solutions for the global semiconductor industry. Additional information can be found at
www.ltx.com.