Post a CommentCredence sells diagnostics, characterization business
The business' new owner is an independent company led by Israel Niv, general manager of Credence's diagnostics and characterization group from January 2003 to February 2005.
By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/22/2008
Credence Systems Corp is continuing its focus on automated test equipment (ATE) for the consumer semiconductor industry and, in doing so, has announced the sale of its diagnostics and characterization business to DCG Systems Inc.
The business’ new owner is an independent company led by CEO Israel Niv, the founder of Optonics Inc, an optical diagnostics and failure analysis company Credence bought in 2003, and general manager of Credence's diagnostics and characterization group from January 2003 to February 2005.
"We are pleased to find a new home for this highly specialized and important business," said Lavi Lev, president and CEO of Credence, in a statement Thursday. "The products developed by the diagnostics and characterization group have always been cutting edge, and are critical for manufacturing process bring-up and diagnostics tasks associated with advanced semiconductor designs.
“As Credence focuses on the consumer-based semiconductor ATE markets, one of our priorities was the continued care of our DCG customers, and the qualifications of the new management team. We believe DCG customers will benefit from the focus and experience Israel and his team bring to the business," Lev said.
Under the agreement, entered into on February 14, Credence will receive up to $10 million for the business, with $2.5 million, subject to certain adjustments, payable on each of the first and second anniversaries of the close of the transaction. The balance will be payable on the third anniversary of the close of the transaction contingent on DCG’s achievement of revenue targets, which Credence did not disclose.
As part of the transaction, Credence will transfer up to $22 million of book value of assets, including component inventory, fixed assets, intangibles, and various liabilities related to the diagnostics and characterization business. Credence said it will also provide reimbursable transition services for a limited period of time following the closing, however, did not disclose the length of time. Further, Credence said it will fund the fulfillment of approximately $4 million of existing warranty and service contract obligations through DCG.
Credence closed the transaction with DCG Systems on February 20, and expects to take a non-cash charge in connection with divestiture of approximately $22 million in its fiscal Q1, ended February 2. The charge is in addition to the $37 million to $39 million total loss for the quarter that Credence guided for in January. Milpitas, Calif-based Credence is slated to report on the quarter on March 3.
On its end, DCG said it will base the merged company in Fremont, Calif, and will continue to provide design diagnostics and failure analysis technologies to semiconductor companies.
"DCG Systems provides the best bridge between the design community and the fab yield and failure analysis teams with its diagnostic systems and software to enhance yield ramp, silicon design debug and IC quality," Niv said in the statement. "We intend to focus fully on the specific needs of our customers as they move to the 45-nm technology node and beyond. We are committed to continuing to provide leading-edge tools, methodologies and service to our customers in order to meet their ongoing technology needs."
DCG products include the recently introduced Ruby laser voltage prober, the OptiFIB-IV focused ion-beam system, the Meridian-IV emission system, and NEXS suite of EDA link software. In addition, DCG will continue to offer the EmiScope, TriVision, and P3X instruments, established in the Credence product portfolio.
In other test and measurement news this week, KLA-Tencor put in a $465.8 million bid for ICOS Vision Systems Corp NV, a Belgium-based maker of inspection equipment for semiconductor packaging and interconnect applications.
