Cohu, Inc. (NASDAQ: COHU) today announced the completion of its
acquisition of Xcerra Corporation. The combination creates a global
leader in back-end semiconductor equipment and services, and
printed circuit board test with a breadth of products that are
unmatched in the industry.
“The acquisition of Xcerra accelerates our strategy to diversify
our product offerings and customer base, expanding Cohu’s
addressable market to approximately $5 billion across
semiconductor test and handling equipment, thermal subsystems, test
contacting, vision inspection, MEMS and PCB test. This combination
also further strengthens our ability to fully capitalize on the
growth opportunities in our key target markets of automotive,
industrial, IoT and communications,” said Luis Müller, Cohu's
President and CEO. “Although softening in the mobility market
combined with current geopolitical uncertainty are creating
near-term headwinds, we remain confident about the long-term growth
opportunities in these markets as well as our ability to deliver on
our synergy goals and to profitably grow Cohu in the years ahead,”
added Müller.
The transaction is expected to be immediately accretive to
non-GAAP earnings per share and generate over $20 million of annual
run-rate cost synergies within 2 years of closing, excluding
stock-based compensation and other charges. Cohu expects to achieve
an additional $20 million of annual run-rate synergies over the
three to five-year mid-term from products and facilities
consolidation.
A conference call to discuss Cohu’s third quarter financial
results, the go-forward strategy and fourth quarter guidance for
the combined company will be held in early November.
Appointment of Two New Directors to Cohu’s Board of
Directors
Cohu also announced that David G. Tacelli and Jorge L. Titinger
have been appointed to the Cohu Board of Directors, with Mr.
Tacelli to serve as a Class III Director and Mr. Titinger to serve
as a Class II Director, effective immediately in conjunction with
the completed acquisition.
"We are pleased to welcome Dave Tacelli and Jorge Titinger to
our Board," said James Donahue, Cohu’s Chairman of the Board.
"Their extensive semiconductor equipment expertise will add
significant value to our Board of Directors."
Mr. Tacelli served as Chief Executive Officer and as a director
of Xcerra since November 2005. He also served as President of
Xcerra since May 2002 and served as Chief Operating Officer from
May 2002 to November 2005. Prior to that, he was Executive Vice
President from December 1999 to May 2002. Prior to that, from 1990
to 2002, Mr. Tacelli served in various management positions with
Xcerra. Prior to joining Xcerra, Mr. Tacelli was employed by Texas
Instruments for seven years in various management positions.
Mr. Titinger served as a director of Xcerra since August 2012.
Mr. Titinger currently serves as a director of CalAmp Corp, a
position he has held since June 2015; and as a director of Hercules
Capital, Inc., a position he has held since October 2017. From
February 2012 to November 2016, he was President and Chief
Executive Officer of Silicon Graphics International Corp. (“SGI”).
After SGI was acquired by Hewlett Packard Enterprise, Mr. Titinger
founded Titinger Consulting, a firm focused on providing strategy,
corporate transformation, and culture advice to its clients. Mr.
Titinger also served as President and Chief Executive Officer of
Verigy Ltd. (“Verigy”) from January 2011 until October 2011, as its
President and Chief Operating Officer from July 2010 to January
2011, and as its Chief Operating Officer from June 2008 to July
2010. Prior to his service at Verigy, Mr. Titinger held executive
positions with FormFactor, Inc. from November 2007 to June 2008,
and KLA-Tencor Corporation from December 2002 to November 2007.
With the addition of Tacelli and Titinger, the Cohu Board of
Directors expands to eight members.
Additional Transaction Details:
Cohu and Xcerra shareholders previously voted to approve
proposals related to the acquisition on August 30, 2018. At the
effective time of the acquisition, the outstanding shares of Xcerra
common stock were each cancelled and converted into the right to
receive $9.00 in cash, without interest, and 0.2109 of a share of
Cohu common stock. The total consideration payable on the cancelled
shares consists of approximately 11.8 million shares of Cohu common
stock and approximately $503 million in cash to former Xcerra
shareholders. As a result of the completed acquisition, Xcerra
shares will cease to be traded on the NASDAQ Global Market
effective today, October 1, 2018.
In connection with the acquisition, Cohu and certain of its
subsidiaries entered into a Credit and Guaranty Agreement with
Deutsche Bank AG New York Branch, and other lenders that may from
time to time be a party to the Credit and Guaranty Agreement.
Pursuant to the Credit and Guaranty Agreement, the lenders have
provided Cohu with a senior secured term loan facility of $350
million to finance a portion of the cash used to complete the
transaction and to pay related costs and expenses.
Deutsche Bank Securities served as the exclusive financial
advisor to Cohu and Cleary Gottlieb Steen & Hamilton LLP served
as Cohu’s legal advisor.
About Cohu:
Cohu (Nasdaq: COHU) is a global leader in back-end semiconductor
equipment and services, delivering leading-edge solutions for the
manufacturing of semiconductors and printed circuit boards.
Additional information can be found at www.Cohu.com.
Forward Looking Statements:
Certain statements contained in this release may be considered
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995, including statements
regarding the Xcerra acquisition; our business strategy; the
addressable market; near-term market conditions and uncertainties;
future growth and synergy opportunities; capturing new customers;
and any other statements that are predictive in nature and depend
upon or refer to future events or conditions, and include words
such as “may,” “will,” “should,” “would,” “expect,” “anticipate,”
“plan,” “likely,” “believe,” “estimate,” “project,” “intend,” and
other similar expressions among others. Statements that are not
historical facts are forward-looking statements. Forward-looking
statements are based on current beliefs and assumptions that are
subject to risks and uncertainties and are not guarantees of future
performance. Actual results could differ materially from those
contained in any forward-looking statement as a result of various
factors, including, without limitation: risks associated with
acquisitions; inventory, goodwill and other asset write-downs; our
ability to convert new products into production on a timely basis
and to support product development and meet customer delivery and
acceptance requirements for new products; our reliance on
third-party contract manufacturers and suppliers; failure to obtain
customer acceptance resulting in the inability to recognize revenue
and accounts receivable collection problems; revenue recognition
impacts due to ASC 606; market demand and adoption of our new
products; customer orders may be canceled or delayed; the
concentration of our revenues from a limited number of customers;
intense competition in the semiconductor equipment industry; our
reliance on patents and intellectual property; compliance with U.S.
export regulations; impacts from the Tax Cuts and Jobs Act of 2017;
geopolitical issues; ERP system implementation issues; the
seasonal, volatile and unpredictable nature of capital expenditures
by semiconductor manufacturers; rapid technological change; and
significant risks associated with the Xcerra acquisition including
but not limited to (i) the ability of Cohu and Xcerra to integrate
their businesses successfully and to achieve anticipated synergies,
(ii) the possibility that other anticipated benefits of the
transaction will not be realized, (iii) litigation relating to the
transaction that has been or could be instituted against Cohu,
Xcerra, or their respective directors, (iv) possible disruptions
from the transaction that could harm Cohu’s and/or Xcerra’s
respective businesses, (v) the ability of Cohu or Xcerra to retain,
attract and hire key personnel, (vi) potential adverse reactions or
changes to relationships with customers, employees, suppliers or
other parties resulting from the completion of the acquisition,
(vii) the adverse impact to Cohu’s operating results from interest
expense on the financing debt, rising interest rates, and any
restrictions on operations related to such debt, and (viii)
continued availability of capital and financing and rating agency
actions. These and other risks and uncertainties are discussed more
fully in Cohu's filings with the Securities and Exchange
Commission, including the most recently filed Form 10-K and Form
10-Q, in the Registration Statement on Form S-4 that has been filed
by Cohu with the SEC containing a prospectus with respect to the
Cohu common stock being issued in the transaction and a joint proxy
statement of Cohu and Xcerra in connection with the transaction
that is contained therein, and the other filings made by Cohu with
the SEC from time to time, which are available via the SEC’s
website at www.sec.gov. Except as required by applicable law, Cohu
does not undertake any obligation to revise or update any
forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise.
For press releases and other information of interest to
investors, please visit Cohu’s website at www.cohu.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20181001005569/en/
Cohu, Inc.Richard YerganianVice President, Investor
RelationsTel. 781.467.5063Email rich.yerganian@cohu.com
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