Munich, Germany - The combination of Rood Technology and Microtec, with consolidated sales in 2007 of approx. Euro 17.5 million (approx. $ 26 milion) and close to 165 employees, will have a strong European market position and will be the undisputed largest independent European testhouse based on its present service provision: testing, test engineering, failure analysis and qualification.
Microtec is one of the larger independent testhouses in Europe, with a major position in both Opto Electronics (chips for optical applications) and with fabless semiconductor companies. Sales for 2007 totalled Euro 8.0 million (approx. $ 12 milion), with an operating result (EBIT) of approx. Euro 648,000 (under German GAAP) (approx.$ 970.000). 40% of sales is realized in Germany, 16% in Britain, 12% in Scandinavia, 20% in Switzerland and the remainder in the rest of Europe. The company has approximately 65 employees.
As stated in the 2007 annual report, use of semiconductors (microchips) in Europe is expected to continue to increase while production of these microchips in Europe will decrease. In response to these developments Rood Technology pursues the following objectives strengthening of its position: among fabless semiconductor companies (including fabless design houses); in the area of supply chain management; in failure analysis, qualification and test engineering as well as in the automotive, industrial, medical and telecom sectors. Furthermore it is planned of strengthening its partnerships, in particular with Millennium Microtech and the consolidation of its position with Integrated Device Manufacturers (IDMs).
The takeover of Microtec to a great extent meets these objectives. The company has a strong position among fabless semiconductor companies and already has an excellent position in supply chain management. Microtec's background is largely in failure analysis and qualification, and as a result the company has a very strong basis and position in this field. It also has a lead in the area of opto-electronics.
Microtec's present board will join Rood Technology's Corporate Management Team in the following positions: Reinhard Pusch (54), CSO (Chief Sales Officer) and Vice-President Hans-Peter Neuber (50), COO (Chief Operating Officer). Rood Technology's board of management and Microtec's board have recently had intensive discussions about the strategy, integration and optimization, and see many benefits in a combination of both companies. While a functional matrix organization will be introduced, Microtec GmbH will continue as a legal entity. Rood Technology's supervisory board intends to introduce Mr Pusch and Mr Neuber during an extraordinary shareholders' meeting.
The acquisition price of Microtec GmbH's shares is Euro 3,050,000 (approx. $ 4,575,000), of which Euro 2,800,000 (approx. $ 4,200,000) will be paid immediately and Euro 250,000 (approx. $ 370,000) at the end of 2008. The acquisition will be paid in cash, which has been raised partly by means of a share issue and partly by means of a bank loan in combination with a bridging loan. The acquisition has been made possible to a great extent by independent private investors as well as by TIIN (The Informal Investment Network). Microtec will be effectively taken over as of 1 January 2008. Under IFRS, the company will be consolidated as from 3 July 2008.