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.
InTest Corporation, a publicly held company (Nasdaq INTT) based in Cherry Hill, New Jersey is a leader in the design and manufacture of docking hardware, test head manipulators and tester interfaces which are used with automatic test equipment by semiconductor manufacturers during the testing of wafers and packaged devices.
OEM Capital , which had assisted the company in its recapitalization a few years before, was asked back to assist Temptronic Corporation in managing the sale or merger of its business to help unlock shareholder value. As the company and its industry was rebounding from a depressed semiconductor capital equipment market, we believed that the best way to command a premium price in a tax advantaged way would be by merging it with an attractive, publicly traded company.
OEM Capital worked closely with management and used our industry contacts to network with a number of key executives at the companies we had targeted. Interested parties were then invited for a detailed presentation on the prospects of the business and an opportunity to interact with senior management.
As a result of our management of the sale process, Temptronic’s shareholders were able to realize a multiple of revenues valuation for their company that was more than five times that of a recent business appraisal . At the same time, InTest shareholders benefit from a merger that is accretive to its earnings per share and provides an opportunity for an increased price-to-earnings multiple arising from a higher market capitalization and the larger number of shares in its public ‘float’.
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.