Cohu, Inc. (NASDAQ:COHU), based in Poway will pay $796 million to acquire the Massachusetts-based Xcerra Corp. (NASDAQ:XCRA) in a combination of cash and stock offering.
The deal comes two months after a U.S. security panel blocked Xcerra’s sale to a Chinese state-backed fund, according to Reuters.
The acquisition is expected to make Cohu a company with a broad spectrum of semiconductor and printed circuit boards (PCB) test expertise with combined sales in excess of $800 million for the last 12 months, according to a news release.
The transaction is expected to close in the second half of calendar year 2018, subject to approval by both companies’ respective shareholders, antitrust regulatory approvals and other customary closing conditions.
Cohu intends to fund the cash payable to Xcerra shareholders with a combination of cash on hand from the combined companies’ balance sheets and approximately $350 million in debt financing. Xcerra shareholders are expected to own approximately 30 percent of the combined company upon the closing of the transaction. The dealtransaction has been unanimously approved by the boards of directors of both companies.
“The acquisition of Xcerra increases our addressable market to approximately $5 billion across handlers, contactors, test and inspection,” said Luis Müller, Cohu’s president and CEO.
Upon the closing of the deal, Xcerra shareholders will be entitled to receive $9 in cash and 0.2109 of a share of Cohu common stock, subject to the terms of the definitive agreement.