Thursday, January 26, 2006
Blast From The Past
Blast From The Past Amidst all the news today one announcement caused us to look at the past. Kulicke & Soffa (KLIC) announced the sale of their test division. From the press release: -- K&S has signed a definitive agreement to sell its wafer test assets to SV Probe, PTE, Ltd. -- K&S has also signed a definitive agreement to sell its package test assets to Investcorp Technology Ventures II, L.P., which is managed by the Technology Investment Group of Investcorp, a global investment firm. K&S invested $290 million to enter the test business. $225 million in cash to buy Cerprobe and then on November 14, 2000, the company announced that it has also signed a definitive agreement for a $65 million cash acquisition of privately held Probe Technology Corporation. What did we say back when K&S made their entry into the test business? Here's a bit of the commentary: "So, what we believe will be necessary is for K&S to quickly build critical mass in the established markets, efficiently integrate the organizations for operating leverage, and invest heavily in a technology strategy that enables finer-pitch wafer probing." The full story is still here at the site: http://www.infras.com/klic.html From what we understand K&S is going to get $27 million from the sale of the test division. Obviously that is not a very good return - and it does not include the 5 years of losses posted by the unit. Ahh... Hindsight is 20/20. Shoulda, coulda, woulda. Acquisition Integration: It's been a thorn in the side of the chip and chip equipment business for a long time. A number of companies are working very hard to adjust the mistakes made in the past. Hopefully some lessons have been learned. Are you enjoying the rally? I am and it seems as though Mr. Market feels good about the sector. Then again, it does not pay to be greedy with chip stocks..... Keep your guard up!