Teradyne, Inc. (NYSE:TER) and Eagle Test Systems, Inc. (NASDAQ:EGLT) announced that they have signed a definitive agreement under which Teradyne will acquire Eagle Test. Teradyne is a world leader in System-On-a-Chip (SOC) semiconductor test, while Eagle Test is a leading provider of analog, mixed-signal and radio frequency semiconductor test products. Under the terms of the agreement, Eagle Test shareholders will receive $15.65 per share in cash. The aggregate purchase price is expected to be approximately $250 million, net of cash acquired, and includes the fair value of fully vested employee equity instruments. Teradyne has secured a bridge financing commitment in connection with the transaction.
The transaction is expected to be accretive to 2009 non-GAAP EPS, after excluding purchase accounting effects.
“We’re very pleased to be combining forces with Eagle Test,” said Mike Bradley, president and CEO of Teradyne. “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. We plan to put the full weight of our worldwide distribution organization behind Eagle Test’s ETS product line so customers can benefit from this very cost effective test platform.”
“I am extremely excited about the opportunity to combine the effectiveness of Eagle Test’s products and the strength of our financial model with Teradyne’s tremendous market presence and worldwide distribution and support organization,” said Len Foxman, CEO, president and chairman of Eagle Test. “Teradyne’s sales and marketing infrastructure, along with their global customer relationships, will greatly accelerate Eagle Test’s mission to deliver strong customer value and grow our business.”
The acquisition will be subject to customary closing conditions, including the approval of Eagle Test shareholders, the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and the absence of a material adverse change with respect to Eagle Test. The acquisition is expected to close in the fourth quarter of 2008. After the closing, Eagle Test will be run as a business unit within Teradyne’s Semiconductor Test Division.
A webcast to discuss the acquisition will be held on Tuesday, September 2, 2008 at 4:30 p.m. Eastern Time, Interested investors should access the webcast at www.teradyne.com and click on “Investors” at least five minutes before the call begins. Interested investors can also call (866) 322-9525 in the U.S. and Canada and (706) 902-0224 outside the U.S. and Canada. The conference call ID is 62585196. A replay will be available approximately two hours after the completion of the call. The replay number in the U.S. and Canada is (800) 642-1687 and outside the U.S. and Canada is (706) 645-9291. The pass code for both numbers is 62585196. A replay will also be available on the Teradyne website at www.teradyne.com. Click on “Investors” for a link to the replay. The replay will be available via phone and through the website until September 19, 2008.
The expected impact of the transaction to Teradyne’s earnings per share is only provided on a non-GAAP basis due to the difficulty in forecasting and quantifying the purchase accounting amounts that would be required to be included in the GAAP guidance. This non-GAAP guidance is provided in order to better assess and reflect operating performance. Management believes the non-GAAP guidance helps indicate Teradyne’s baseline performance before purchase accounting effects, gains, losses or other charges that are considered by management to be outside Teradyne’s ongoing operations. Teradyne believes this non-GAAP information will aid investors’ overall understanding of its results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how Teradyne plans and measures its own business. The presentation of non-GAAP information is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.
About Teradyne, Inc.
Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. In 2007, Teradyne had sales of $1.1 billion and currently employs about 3,600 people worldwide. Teradyne ® is a registered trademark of Teradyne, Inc. in the U.S. and other countries. All product names are trademarks of Teradyne, Inc. (including its subsidiaries).
About Eagle Test Systems, Inc.
Eagle Test Systems (NASDAQ:EGLT) designs, manufactures, sells and services high performance automated test equipment for the semiconductor industry. The company’s products are used to test analog, mixed-signal and radio frequency (RF) semiconductors that are used in products such as digital cameras, MP3 players, automotive electronics, cellular telephones, computers and peripherals. The company was founded in 1976 and has offices located throughout the world, with corporate headquarters in Buffalo Grove, Illinois.