By Lisa Kerner
Charlotte, N.C., June 23 - Credence Systems Corp. and LTX Corp. agreed to combine 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 determined at the closing of the merger that will cause Credence shareholders to own 50.02% of the outstanding shares of the combined company and LTX shareholders to own the remaining 49.98%, a joint news release said.
According to the release, if the exchange ratio was calculated based on shares outstanding as of June 20, each outstanding share of Credence common stock would be converted into about 0.6133 shares of LTX common stock in the transaction.
A termination fee of $6.75 million is included in the merger agreement, a form 8-K filing with the Securities and Exchange Commission stated.
Shareholders of both Credence and LTX must approve the transaction, which is expected to be completed by the end of September, according to the release.
The companies both provide automated test equipment for the consumer semiconductor industry.
Credence president Lavi Lev will become executive chairman of the combined company for a transitional period while LTX chief executive officer and president David Tacelli will be the new company's CEO and president.
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," Lev stated in the release.
"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," Lev added.
LTX chief financial officer and vice president Mark Gallenberger expects the transaction to be accretive on a non-GAAP basis, excluding restructuring charges, within 12 months of combined operations and realization of the cost savings.
Credence, based in Milpitas, Calif., was advised by Lehman Brothers Inc. LTX, located in Norwood, Mass., was advised by J.P. Morgan Securities Inc.
| Acquirer: | LTX Corp.
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| Target: | Credence Systems Corp.
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| Announcement date: | June 23
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| Price per share: | About 0.6133 LTX shares
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| Termination fee: | $6.75 million
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| Expected closing: | September of 2008
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| Stock price for acquirer: | Nasdaq: LTXX: $2.81 on June 20
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| Stock price of target: | Nasdaq: CMOS: $1.25 on June 20
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