Summary
Teradyne, Inc. (TER) announced on October 6, 2011, the completion of its acquisition of LitePoint Corporation, a key player in wireless test solutions. This strategic move, effective October 5, 2011, involved a merger where LitePoint became a wholly-owned subsidiary of Teradyne. The transaction's initial cost was approximately $510 million, net of cash and tax benefits from LitePoint. Additionally, there's a potential earn-out of up to $70 million, payable in cash or Teradyne stock, contingent upon LitePoint achieving certain revenue performance targets through 2012. The company also assumed LitePoint's outstanding equity awards and stock appreciation rights.
Key Highlights
- 1Completion of the acquisition of LitePoint Corporation by Teradyne on October 5, 2011.
- 2LitePoint is now a wholly-owned subsidiary of Teradyne.
- 3Initial purchase price approximately $510 million, net of LitePoint's cash and tax benefits.
- 4Potential earn-out of up to $70 million based on 2012 revenue performance.
- 5Earn-out payments can be made in cash or Teradyne common stock at Teradyne's discretion.
- 6Teradyne assumed all unvested LitePoint equity awards and stock appreciation rights.
- 7This acquisition is expected to enhance Teradyne's position in the wireless test market.
Frequently Asked Questions
The primary impact is the official announcement of Teradyne's acquisition of LitePoint Corporation. This provides clarity on the transaction's completion, the initial financial outlay, and potential future contingent payments tied to LitePoint's performance.
The initial cost was approximately $510 million. In addition, there is a potential earn-out of up to $70 million, making the total potential acquisition cost approximately $580 million, subject to LitePoint achieving specific revenue targets.
The filing states that full financial statements and pro forma financial information for the acquired business will be filed by amendment within 71 days. This means investors can expect more detailed financial disclosures regarding the combined entity in an upcoming amendment to this filing.
The earn-out payment, up to $70 million, is contingent on LitePoint achieving certain revenue-based performance targets through 2012. Teradyne has the discretion to pay this earn-out in either cash or its own common stock.