Credence, LTX to Merge

Chip testing equipment makers Credence Systems Corp. and LTX Corp. will merge in an all-stock transaction reportedly worth more than $176 million.

Under the terms of the agreement, announced by both companies yesterday, Credence shareholders will have a slight majority in ownership of the new company, but LTX will control its management and board.

Credence shareholders will receive enough shares of stock in Norwood-based LTX to give them 50.02 percent ownership in the new company, while LTX shareholders will own 49.98 percent of the combined business.

Credence President and CEO Lavi Lev will become executive chairman of the new company during the transition; LTX CEO and President David Tacelli will retain his position with the new company. LTX Vice President and CFO Mark Gallenberger will become CFO of the new company; Credence Senior Vice President and CFO Casey Eichler will remain during the transition. The combined board will include five LTX directors and four Credence directors.

The deal is worth about $176.6 million, based on Credence's most recent publicly available share count and LTX's closing price Friday, the Associated Press reported. After integration, an annual cost savings of $25 million is expected, the companies said.

"This merger, from a technical and business point of view, represents the logical next step for both companies' long-term growth," said Lavi Lev, president and CEO of Credence. "We believe the combined strength of our technical expertise in RF (radio frequency), digital, mixed-signal and analog, coupled with a complementary product portfolio, will benefit our customers as they test and deploy high volume, highly integrated devices into their respective market segments. From a business perspective, the merger broadens our customer base and provides a strong opportunity for growth."

The merger, approved by the boards of both companies, is subject to approval by Credence and LTX stockholders, as well as customary closing conditions. Pending regulatory approval, the companies expect the transaction to be completed by the end of September.

For more information, visit: www.credence.com or www.ltx.com