United Test and Assembly Center Ltd, Singapore's second-largest provider of computer chip-testing services, said it will buy UltraTera Corp (聯測科技) for S$794 million (US$477 million) in stock to expand in Taiwan.
United Test will exchange 1.6 of its shares for each share of UltraTera, it said in a statement to the stock exchange.
That's equivalent to S$1.57 a share based on the last traded price of United Test, or NT$30.90, a 49-percent premium to the NT$20.70 close of UltraTera on the Gretai Securities Market (櫃台買賣中心).
United Test, which tests and packages computer chips for customers such as Nanya Technology Corp (南亞科技), said it is buying Ultra-Tera to expand geographically and to gain new customers such as Hynix Semiconductor, the fourth-largest maker of memory chips.
Both United Test and UltraTera specialize in testing and packaging memory chips, the statement said.
"The enlarged group will be able to solidify its geographic presence in Taiwan -- a key market for chip test and assembly -- and complement our core operations in Singapore," chief executive Lee Joon Chung said in a statement.
The acquisition is expected to be completed by September.
United Test has been broadening its product line to cover other kinds of chips used in communications devices.
Memory chips accounted for 56.4 percent of its revenue in the first half of last year.
UltraTera last year had a loss of NT$8.6 million (US$262,000) on sales of NT$2.2 billion.
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