SINGAPORE (THE BUSINESS TIMES) - Mainboard-listed AEM Holdings is acquiring French semiconductor test solutions provider Mu-TEST for 7.5 million euros (S$11.3 million), it announced on Dec 28.
AEM, which provides advanced chip testing solutions, said that Mu-TEST's customisable low-cost tester capabilities complement its own solutions, allowing AEM to offer complete system level test solutions for the semiconductor and electronics industries.
Under a Dec 27 share purchase agreement, AEM is fully acquiring Mu-TEST, with its founder and chief executive officer Mathieu Duprez to continue as general manager and director after the acquisition.
The purchase price was arrived at after negotiations on a willing buyer and willing seller basis, using an enterprise value of eight million euros and assuming an estimated net debt of 475,000 euros as at Dec 31, 2019.
Payment will be made in three stages over the next three years, with a cash payment of 4.9 million euros, a one-year holdback of 913,912 euros, and a three-year performance earnout of 1.7 million euros for Mr Duprez. An earnout is a contractual provision stating that the seller of a business is to obtain additional compensation in the future if the business achieves certain financial goals.
AEM will also provide a corporate loan of about 500,000 euros to Mu-TEST to repay its existing convertible bonds.
As at Sept 30, Mu-TEST's book value is 2.6 million euros and its net tangible asset value is 773,000 euros. AEM said that in arriving at the purchase price, it has taken into account "the strategic merits of the acquisition".
The agreement also provides an incentive bonus of 344,155 euros if Mu-TEST achieves certain revenue targets in FY 2021 and FY 2022.
The acquisition will be funded through internal resources and is not expected to have any material impact on AEM's net tangible assets per share and earnings per share for the financial year ended Dec 31, 2020.
AEM shares last closed up one cent or 0.53 per cent at $1.89 on Friday.