Credence sells diagnostics biz to former GM

Feb. 24, 2008 – Credence Systems has sold its diagnostics and characterization business to DCG Systems, an independent company led by Israel Niv, former GM of the business from 2003-2005 and founder of Optonics, an emission-based optical diagnostics and failure analysis supplier bought by Credence in late 2002. Sale price is “up to $10M” plus another $2.5M subject to unspecified terms, to be paid within three years.

The deal includes up to $22M in book value of assets, including component inventory, fixed assets, intangibles and various liabilities, and Credence will fund ~$4M in existing warranty/service contracts and provide “reimbursable transaction services” for a limited time. Credence will take a ~22M charge in addition to its anticipated $37-$39M loss for fiscal 1Q08, including $19M in extraordinary charges.

“We are pleased to find a new home for this highly specialized and important business,” said Credence president/CEO Lavi Lev, in a statement. “As Credence focuses on the consumer-based semiconductor ATE markets, one of our priorities was the continued care of our DCG customers, and the qualifications of the new management team. We believe DCG customers will benefit from the focus and experience Israel and his team bring to the business.”

The “newly formed” Fremont, CA-based DCG Systems will provide leading edge semiconductor design diagnostics and failure analysis technologies, including a “Ruby” laser voltage prober, “OptiFIB-IV focused ion beam system, “Meridian-IV” emission system, and “NEXS” suite of EDA link software. “DCG Systems provides the best bridge between the design community and the fab yield and failure analysis teams with its diagnostic systems and software to enhance yield ramp, silicon design debug and IC quality,” stated Niv, adding that the company will “focus fully on the specific needs of our customers as they move to the 45nm technology node and beyond.”


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