Diodes Incorporated (NASDAQ: DIOD) shares gained ground to begin Tuesday, on word it has entered into a definitive agreement to acquire
ElevATE Semiconductor, Inc. in an all-cash transaction for $250 million.
ElevATE is a fabless semiconductor company based in San Diego, California that specializes in the development of integrated circuits (IC) for the Automated Test Equipment (ATE) industry. ElevATE addresses the industry’s most complex ATE challenges by designing the lowest power and highest density solutions, with the goal of providing the lowest possible cost of test.
The transaction combines ElevATE’s ATE IC technology leadership with Diodes’ broad product portfolio, manufacturing scale and global sales reach to increase penetration of the ATE market.
It’s also expected to be accretive immediately to Diodes’ revenue, gross margin, and earnings per share.
The move is also anticipated to add approximately $50 million of revenue in the first 12 months post-close, with revenue expected to grow at a CAGR of greater than 20% over the next four years with gross margin significantly higher than Diodes’ corporate average; and also expands
Diodes’ analog and mixed signal product offerings as well as provides significant opportunity for Diodes’ portfolio in applications within the ATE market.
DIOD shares acquired $3.07, or 3.3%, to $95.36.
