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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ltx (MM) | NASDAQ:LTXX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.79 | 0 | 01:00:00 |
Strategy
Update
Credence Systems Corporation
Presenter Name
Date of Presentation
Filed Pursuant to Rule 425
Filing Person: Credence Systems Corporation
Commission File No.: 000-22366
Subject Company: LTX Corporation
Commission File No.: 000-10761
|
Credence Confidential
2
Credence and LTX Agree to Merge
Key Details
Definitive agreement to combine in a strategic merger (6/20/08)
Merger will create a new test company
Regulatory
and
shareholder
approvals,
integration
planning
-
in
process
Transaction expected to close by 9/30/08
Separate companies until closing
Remain competitors, no joint sales, marketing, engineering, roadmap or other
activities
|
Merger
Rationale
Credence Confidential
3
Drives operational synergies and
economies of scale
Increases R&D capacity through
addition of world-class technical
expertise
Expands presence in wireless,
consumer, computing, and
automotive
Enhances customer base &
geographical presence
Accelerates Credences strategy
to address key customer test
challenges
Enhances presence in RF area
Extends portfolio in digital and
mixed-signal
|
Merger
Rationale: Credences Perspective
Past 18 month focus has been on bottom
line health
Improved efficiencies, outsourced manufacturing, divesture businesses not
core to our strategy
Increased investment in Diamond and ASL to better address the needs of
the consumer-driven semiconductor market segments
Focused Sapphire resources to support the computing segment and high-
end consumer-driven market segments
Going forward, the focus includes maximizing opportunities for
top-line growth
LTX offers a complementary technology portfolio which expands our
opportunities, especially in the RF and mixed-signal technology space
Combined entity has an enhanced cash position, larger scale, and
additive
customer base
Combined company has the financial means and R&D muscle to provide
innovative test solutions to further differentiate our offerings
Credence Confidential
4
|
Merger
Rationale: LTX Perspective
LTX has focused on bottom line health and
profitability
The work is complete and primary focus now turns to top-line growth and
expansion
Benefits of merger with Credence
Complementary products and customers that expand our reach
Strong technologies and R&D, for a comprehensive roadmap
Strong support structure, especially in Asia
Expands their role with key subcontractors
Creates a larger company, increasing our impact
Significant synergies, ability to build a financially stronger company
Credence Confidential
5
|
The New
Company: Solving Customer Challenges
Business Challenges
Semiconductor margins
being squeezed
Higher volumes/
Lower ASPs
Increased competition
Narrowing market windows
Credence Confidential
6
It Costs as much to test a chip as it does to design it
Technical Challenges
Semiconductor devices are
getting more complex
Large scale on-chip or in-
package integration of RF,
analog, mixed-signal, and
digital
Requires the right test
strategies and technologies
Cost of Test includes
Equipment costs. Quality costs. Training/ramp up costs
Source: IBS Inc, 2008
0.13µm
(mixed-signal)
90nm
(mixed-signal)
90nm
(digital)
65nm
(digital)
Cost of design and validation (%)
14 %
16 %
11 %
13 %
Cost of manufacturing (%)
74 %
70 %
81 %
75 %
Cost of test (%)
12 %
14 %
8 %
12 %
Higher COT
|
The New
Company: Solving Customer Challenges
Credence Confidential
7
Cost of Test includes
Equipment costs. Quality costs. Training/ramp up costs
Source: IBS Inc, 2008
0.13µm
(mixed-signal)
90nm
(mixed-signal)
90nm
(digital)
65nm
(digital)
Cost of design and validation (%)
14 %
16 %
11 %
13 %
Cost of manufacturing (%)
74 %
70 %
81 %
75 %
Cost of test (%)
12 %
14 %
8 %
12 %
It Costs as much to test a chip as it does to design it
The combined company will focus on reducing the overall cost of test
The right technology
The right price
The right quality
The right ease-of-use
|
Enhanced
Customer Experience
Increased confidence to conduct business with
A larger, more financially resilient and stable company
A company that counts the leading semi providers as its customers
Increased access to technology resulting from strength of the
combined product portfolio
Minimal overlap in most technologies
Platforms and IP (SW & instrumentation) to deliver the most cost
effective
solutions (price and COT)
Good synergies in customers served
Better support resulting from strategic distribution of resources
worldwide
Credence Confidential
8
|
What to
Expect Between Now and Deal closure
Both companies will
Continue to work on the communicated roadmaps. We are
committed to complete our committed projects to customers
Continue to support their respective customers
Meet your capacity expansion demands the same way they do
today
Continue to provide service for your testers the same way we do
today
Account and application teams remain the same
After the merger, any changes will be communicated in a timely
fashion, and both companies are committed to ensuring a smooth
transition
Credence Confidential
9
|
Benefits
of the Merger
The combined company will have
The scale
required to serve the large customer base in the consumer,
computing, automotive, and wireless market segments
The financial strength
to invest in future technologies
A complementary product portfolio
that has the critical mass and is
production proven across millions of devices.
An impressive presence in Asia
where the combined companys
customers will have ready access to over 4,000 installed testers
across
OSATs, Fabless
and IDM companies.
Credence Confidential
10
A reliable, financially strong test partner with the scale and
portfolio to comprehensively address your test needs
|
|
Additional Information
LTX plans to file with the SEC a Registration Statement on Form S-4 in connection with
the transaction and
LTX and Credence plan to file with the SEC and mail to
their respective stockholders a Joint Proxy
Statement/Prospectus in connection
with the transaction. The Registration Statement and the Joint Proxy
Statement/Prospectus will contain important information about LTX, Credence, the
transaction and related
matters. Investors and security holders are urged to
read the Registration Statement and the Joint Proxy
Statement/Prospectus
carefully when they are available.
Investors and security holders will be able
to obtain free copies of the Registration Statement and the Joint
Proxy
Statement/Prospectus and other documents filed with the SEC by LTX and Credence through the
website maintained by the SEC at www.sec.gov.
In addition, investors and security holders will be able to obtain free copies of the
Registration Statement and
the Joint Proxy Statement/Prospectus when they are
available from LTX by contacting Mark Gallenberger at
mark_gallenberger@ltx.com
, or 781
-
467
-
5417 or from Credence by
contacting Brenda Ropoulos at
brenda_ropoulos@credence.com
, or 408
-
635
-
4309.
LTX and Credence, and their respective directors and executive officers, may be deemed to
be participants in
the solicitation of proxies in respect of the transactions
contemplated by the merger agreement. Information
regarding LTXs
directors and executive officers is contained in LTXs Annual Report on Form 10-K for the
fiscal year ended July 31, 2007 and its proxy statement dated November 6, 2007, which are
filed with the SEC.
As of June 16, 2008, LTXs directors and
executive officers beneficially owned approximately 4,201,725
shares, or 6.7%,
of LTXs common stock. Information regarding Credences directors and executive officers is
contained in Credences Annual Report on Form 10-K for the fiscal year ended
November 3, 2007, its proxy
statement dated March 7, 2008, its Current Reports
on Form 8-K filed on April 18, 2008, May 1, 2008, June 10,
2008, and June
17, 2008, and its Form 4 filed on April 29, 2008,
which are filed with the
SEC. As of June 16,
2008, Credences directors and executive
officers beneficially owned approximately 1,348,090 shares, or 1.3%,
of
Credences common stock. In connection with the transaction Mr. Tacelli has agreed that the transaction
will not constitute a change of control for purposes of his Change-of-Control
Employment Agreement dated
March 2, 1998 and Mr. Gallenberger has agreed that
the transaction will not constitute a change of control for
purposes of his
Change-of-Control Employment Agreement dated October 2, 2000. In connection with the
transaction, each of Mr. Lev and Mr. Eichler has entered into a Transition Services
Agreement with Credence
pursuant to which they have agreed to accept new
positions with Credence, and perform certain transition
services for Credence,
for a period of six months following the closing of the transaction in exchange for
certain salary, bonus, acceleration of equity-based awards and other
compensation.
A more complete description will be available in the Registration
Statement and the Joint Proxy
Statement/Prospectus.
|
Forward
Looking Statements
Statements in this presentation regarding the proposed
transaction between LTX and
Credence, including the benefits and synergies of
the transaction, such as the economies of
scale, the complementary portfolios
and the operational efficiencies, the combined companys
scale, financial
strength, product portfolio and impressive presence in Asia and any other
statements
about
LTX
or
Credence
managements
future
expectations,
beliefs,
goals,
plans
or
prospects constitute forward-looking statements within the meaning of the Private
Securities
Litigation Reform Act of 1995. Any statements that are not
statements of historical fact
(including statements containing
believes,
anticipates,
plans,
expects,
may,
will,
would,
intends,
estimates
and
similar
expressions)
should
also
be
considered
to
be
forward-looking statements. There are a number of important factors that could
cause actual
results or events to differ materially from those indicated by
such forward-looking statements,
including: the ability to consummate the
transaction, the ability to successfully integrate LTXs
and
Credences operations and employees; the ability to realize anticipates synergies and cost
savings; the risk of fluctuations in sales and operating results; risks related to the
timely
development of new products, options and software applications and the
other factors
described
in
LTXs
Annual
Report
on
Form
10-K
for
the
year
ended
July
31,
2007
and
Credences Annual Report on Form 10-K for the year ended November 3, 2007 and
their most
recent Quarterly Reports on Form 10-Q each filed with the
SEC. LTX and Credence disclaim
any intention or obligation to update any
forward-looking statements as a result of
developments occurring after the
date of this presentation.
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