Local chip testing and packaging service provider Sigurd Microelectronics Corp (矽格) yesterday said it would launch a tender offer to fully acquire smaller rival Test-Serv Inc (誠遠科技) in a sign of continued consolidation in the nation’s semiconductor industry.
The NT$1.4 billion (US$42.42 million) deal also marks the latest merger and acquisition (M&A) activity in the chip testing and packaging sector.
Sigurd plans to buy all 80.2 million shares of Test-Serv at NT$17.5 per share, representing a 19.86 percent premium compared with the stock’s closing price of NT$14.6 yesterday.
“Sigurd believes this strategic alliance will help boost our market share, allowing the company to become the nation’s No. 1 or No. 2 player in the power management IC testing market,” Sigurd chairman Sidney Huang (黃興陽) told a media briefing.
“We also expect the combination of firms to create strong synergies in products, talent and technologies,” Huang added.
The integration would also boost the company’s competitiveness in vying for new orders in a wide range of areas, including auto-drive cars, drones, wearable devices, wireless chargers and the Internet of Things, he said.
Sigurd, which counts the nation’s biggest handset chip designer MediaTek Inc (聯發科) as one of its major clients, is headquartered in Hsinchu County’s Jhudong Township (竹東). The company mainly provides testing services for customers producing mobile phones, cars, consumer electronics and networking equipment, as well as power management IC testing services.
Sigurd plans to buy Test-Serv shares from today until Jan. 25. The acquisition would become successful after Sigurd buys more than 40 percent of Test-Serv shares.
After the transaction, Test-Serv is to be delisted from the local stock market, Sigurd said.
Sigurd plans to use its own capital to fund the merger and it does not expect the purchase to adversely affect the company’s financial status as it has NT$4 billion in cash and cash equivalents, as well as more than NT$1 billion of unused bank loans.
The company would continue to seek more M&A opportunities to accelerate the firm’s growth, Huang said.
“It is our strategy to grow organically and via M&As,” Huang said.
Sigurd is targeting companies with the potential to help it grow its market share or those that have supplementary products, he added.
Sigurd has a capitalization of NT$3.66 billion and total assets of NT$9.397 billion.
It operates four factories in Taiwan and China, with a total workforce of 1,600, according to the company’s Web site.
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