POWAY, Calif.--(BUSINESS WIRE)--Oct. 1, 2018--
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181001005569/en/
Source: Cohu, Inc.
Cohu, Inc.
Richard Yerganian
Vice President, Investor Relations
Tel.
781.467.5063
Email rich.yerganian@cohu.com
