SAN JOSE, Calif. -- Kulicke & Soffa Industries Inc. has acquired one company and divested a business unit.
K&S (Fort Washington, Penn.) has acquired the assets of Orthodyne Electronics Corp., a supplier of wedge bonders. At the same time, K&S also sold its wire business unit to W.C. Heraeus GmbH, a precious metals and technology group, for $155 million in cash.
Under the terms of the Orthodyne agreement, K&S will fund the acquisition with approximately 7.1 million shares of K&S common stock, plus $80 million in cash. If the transaction is not consummated by Oct. 31, the purchase price will be approximately 19.6 million shares of K&S common stock and no cash.
The deal includes possible earn-out consideration up to an additional $40 million in cash if certain financial objectives are met by Orthodyne over the next three years.
Orthodyne (Irvine, Calif.) is a supplier of both wedge bonders and wedges for the power management and hybrid module markets. Orthodyne's executive team, led by Gregg Kelly, will be retained, as will all 280 employees.
''The acquisition of Orthodyne is in line with our stated strategy and positions K&S to capitalize on our strengths in equipment manufacturing and further cement our position as the leading supplier of interconnect solutions,'' said Scott Kulicke, chairman and CEO of K&S, in a statement.
Under the terms of the wire business agreement, Heraeus will pay $155 million in cash to K&S for its wire business unit, subject to certain working capital adjustments.
K&S and Heraeus will also enter into a strategic technical collaboration agreement that provides reciprocal access to research and development expertise.
''The wire business is one we believe strongly in,'' Kulicke said. ''However, the working capital requirements of this business have become significant and, as a result, no longer make financial sense for us.''
K&S recently announced quarterly net revenue of $176.3 million and a net loss of $6.1 million or minus $0.11 per share. The net loss includes a $9.2 million pre-tax, non-cash charge related to the termination of the company's U.S. pension plan.
Over the years, K&S has bought and sold several assets. In 2004, K&S sold all the assets associated with its advanced packaging technology segment, which consisted solely of the flip chip business. The assets were sold to FlipChip International LLC for approximately $3.4 million in cash.
In early 2006, K&S signed a definitive agreement to sell its wafer test assets to SV Probe Pte. Ltd. K&S also sold its package test assets to Investcorp Technology Ventures II L.P.
Also in 2006, K&S closed the purchase of Alphasem, a supplier of die bonder equipment, from Dover Technologies International Inc., a subsidiary of Dover Corp. The purchase price was $27.1 million in cash, after a working capital adjustment and subject to further post closing adjustments.