Temptronic Corporation, a closely held company based in Newton , Massachusetts is a technology and market leader in the design and manufacture of equipment used to provide in-situ temperature cycling for production and development stage electrical testing of semiconductor wafers and electronic devices.
OEM Capital was asked to assist Temptronic Corporation in re-capitalizing the company, whose founder and controlling shareholder wished to liquidate a large portion of his holdings for retirement purposes but not to transfer voting control to a new investor group.
We worked closely with management to prepare detailed, multi-year cash flow projections and devised a financing structure which would minimize dilution to the non-selling shareholders and be attractive to the largest number of new investors.
OEM Capital approached the company’s lender as well as other financial institutions. We negotiated a US$3.5 million increase to the company’s credit line with a new lender which also gave Temptronic Corporation the
flexibility of using up to US$2 million of the credit line for the redemption of common shares.
In parallel with this activity, we carefully selected and approached a limited number of institutional investors and secured a number of attractive investment proposals. Working closely with the controlling shareholder, we helped develop an attractive proposal from the company’s Japanese distributor in conjunction with a shareholder redemption program using the company’s existing employee stock ownership program.
As a result of our program, selling shareholders were able to liquidate all or part of their holdings while non-selling shareholders were able to modestly increase their ownership percentage without increasing the company’s debt.
Our success with Temptronic Corporation illustrates that superior valuations can be realized for shareholders by a well executed approach by merger and acquisition professionals who are knowledgeable about the industry and the intentions of its participants.