MILPITAS, CA and NORWOOD, MA and LTX Corporation (NASDAQ: LTXX),
both providers of automated test equipment (ATE) for the worldwide
consumer semiconductor industry, today announced that they have
entered into a definitive agreement to combine the two companies in
a tax-free, all-stock merger of equals.
Under the terms of the agreement, Credence shareholders will
receive shares of LTX common stock based on an exchange ratio that
will be determined at the closing of the merger to cause Credence
shareholders to own 50.02% of the outstanding shares of the
combined company and LTX shareholders to own 49.98% of the
outstanding shares of the combined company. If the exchange ratio
was calculated based on shares outstanding as of June 20, 2008,
each outstanding share of Credence common stock would be converted
into approximately 0.6133 shares of LTX common stock in the
transaction.
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, has agreed to
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.
Credence's financial advisor on the transaction is Lehman
Brothers Inc., Morrison & Foerster LLP is acting as Credence's
legal counsel, and Corp-Growth provided M&A advice to Credence.
LTX's financial advisor on the transaction is J.P. Morgan
Securities Inc., and WilmerHale is acting as LTX's legal
counsel.
CONFERENCE CALL AND WEBCAST INFORMATION
The management teams of Credence and LTX will be holding a
conference call and simultaneous webcast to discuss the transaction
on Monday, June 23, 2008 at 8:30 a.m. EDT/5:30 a.m. PDT. To access
the conference call, dial toll-free 866.202.0886, or 617.213.8841
internationally, and enter passcode 50679635. To access the
webcast, visit the Investors section of LTX's website at
www.ltx.com or the Investor Relations section of Credence's website
at www.credence.com. A replay of the conference call is expected to
be available within 24 hours of the call through July 23, 2008. To
access the replay, dial toll free 888.286.8010, or 617.801.6888
internationally, and use passcode 77876392.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
LTX plans to file with the SEC a Registration Statement on Form
S-4 in connection with the transaction and LTX and Credence plan to
file with the SEC and mail to their respective stockholders a Joint
Proxy Statement/Prospectus in connection with the transaction. The
Registration Statement and the Joint Proxy Statement/Prospectus
will contain important information about LTX, Credence, the
transaction and related matters. Investors and security holders are
urged to read the Registration Statement and the Joint Proxy
Statement/Prospectus carefully when they are available.
Investors and security holders will be able to obtain free
copies of the Registration Statement and the Joint Proxy
Statement/Prospectus and other documents filed with the SEC by LTX
and Credence through the website maintained by the SEC at
www.sec.gov.
In addition, investors and security holders will be able to
obtain free copies of the Registration Statement and the Joint
Proxy Statement/Prospectus when they are available from LTX by
contacting Mark Gallenberger at mark_gallenberger@ltx.com, or
781-467-5417 or from Credence by contacting Brenda Ropoulos at
brenda_ropoulos@credence.com, or 408-635-4309.
LTX and Credence, and their respective directors and executive
officers, may be deemed to be participants in the solicitation of
proxies in respect of the transactions contemplated by the merger
agreement. Information regarding LTX's directors and executive
officers is contained in LTX's Annual Report on Form 10-K for the
fiscal year ended July 31, 2007 and its proxy statement dated
November 6, 2007, which are filed with the SEC. As of June 16,
2008, LTX's directors and executive officers beneficially owned
approximately 4,201,725 shares, or 6.7%, of LTX's common stock.
Information regarding Credence's directors and executive officers
is contained in Credence's Annual Report on Form 10-K for the
fiscal year ended November 3, 2007, its proxy statement dated March
7, 2008, its Current Reports on Form 8-K filed on April 18, 2008,
May 1, 2008, June 10, 2008, and June 17, 2008, and its Form 4 filed
on April 29, 2008, which are filed with the SEC. As of June 16,
2008, Credence's directors and executive officers beneficially
owned approximately 1,348,090 shares, or 1.3%, of Credence's common
stock. In connection with the transaction, Mr. Tacelli has agreed
that the transaction will not constitute a change of control for
purposes of his Change-of-Control Employment Agreement dated March
2, 1998 and Mr. Gallenberger has agreed that the transaction will
not constitute a change of control for purposes of his
Change-of-Control Employment Agreement dated October 2, 2000. In
connection with the transaction, each of Mr. Lev and Mr. Eichler
has entered into a Transition Services Agreement with Credence
pursuant to which they have agreed to accept new positions with
Credence, and perform certain transition services for Credence, for
a period of six months following the closing of the transaction in
exchange for certain salary, bonus, acceleration of equity-based
awards and other compensation. A more complete description will be
available in the Registration Statement and the Joint Proxy
Statement/Prospectus.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this press release regarding the proposed
transaction between LTX and Credence, including the terms of the
agreement and the tax-free, all-stock nature of the transaction,
the belief that 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's
ability to address broad market segments, the increased presence in
the Asia-Pacific region, the establishment of a global network of
applications and resources, the continuation of current employees
and directors with the new company, the belief that the combined
strengths of the companies' expertise and product portfolio will
benefit customers, the creation of a test company with the
financial strength, growth opportunities, critical mass, and
operational efficiency to lead the industry, the expectation that
the combination will drive efficiencies associated with operating a
larger business, and the anticipation of saving approximately $25
million at the end of the integration period, the expectation that
the merger will be accretive within 12 months, the expected
timetable for completing the transaction and any other statements
about LTX or Credence managements' future expectations, beliefs,
goals, plans or prospects constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements that are not statements of historical fact
(including statements containing "believes," "anticipates,"
"plans," "expects," "may," "will," "would," "intends," "estimates"
and similar expressions) should also be considered to be
forward-looking statements. There are a number of important factors
that could cause actual results or events to differ materially from
those indicated by such forward-looking statements, including: the
ability to consummate the transaction, the ability to successfully
integrate LTX's and Credence's operations and employees; the
ability to realize anticipated synergies and cost savings; the risk
of fluctuations in sales and operating results; risks related to
the timely development of new products, options and software
applications and the other factors described in LTX's Annual Report
on Form 10-K for the fiscal year ended July 31, 2007 and Credence's
Annual Report on Form 10-K for the fiscal year ended November 3,
2007 and their most recent Quarterly Reports on Form 10-Q each
filed with the SEC. LTX and Credence disclaim any intention or
obligation to update any forward looking statements as a result of
developments occurring after the date of this press release.
ABOUT CREDENCE
Credence Systems Corporation (NASDAQ: CMOS) is a global provider
of automated test equipment (ATE) to the high growth, consumer
semiconductor industry. Credence is committed to deliver the
highest standards of value -- an optimal combination of technology,
turn-around time, reliability, ease of use, service and support --
to every customer, which enables important cost and performance
advantages for integrated device manufacturers (IDMs), wafer
foundries, outsource assembly and test (OSAT) suppliers and fabless
chip companies worldwide. An ISO 9001-certified company with a
presence in 20 countries, Credence is headquartered in Milpitas,
California. More information is available at www.credence.com.
ABOUT LTX
LTX Corporation (NASDAQ: LTXX) is a leading supplier of test
solutions for the global semiconductor industry. LTX's X-Series,
the industry's most comprehensive family of production-proven,
compatible test systems, delivers a scalable solution that provides
the right test performance and the right cost of test. Combined
with LTX's industry-leading applications engineering and customer
service teams, the X-Series enables companies to accelerate their
time to market, optimize test economics and stay ahead of the
technology curve. Additional information can be found at
www.ltx.com.
Credence is a registered trademark, and Credence Systems is a
trademark, of Credence Systems Corporation. LTX is a registered
trademark of LTX Corporation.
All other trademarks are the property of their respective
owners.
CONTACTS PR Jane Evans Ryan Genuity PR Tel. 408-489-6391 Email
Email Contact IR Brenda Ropoulos Credence Systems Corporation Tel.
408-635-4309 Email Email Contact Mark Gallenberger LTX Corporation
Tel. 781.467.5417 Email Email Contact
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