FREMONT, CA - Aehr Test Systems (NASDAQ:AEHR), a global supplier of semiconductor test and burn-in equipment, announced today a definitive agreement to purchase Incal Technology, Inc. for $21 million. The acquisition will integrate Incal's high-power test solutions into Aehr's product offerings, targeting the artificial intelligence (AI) semiconductor sector.
Incal Technology, a private company based in Fremont, California, specializes in reliability and burn-in test solutions for AI semiconductor manufacturers. Its products are designed to handle the ultra-high-power requirements of AI accelerators, GPUs, and high-performance computing processors, which can consume more than 1,000 watts of power. This move positions Aehr to address the unique testing needs of these high-power devices, from engineering to high-volume production.
Aehr Test Systems President and CEO Gayn Erickson expressed that the AI semiconductor market presents a significant opportunity, particularly for wafer level burn-in, and the acquisition of Incal's high-power solutions will enable Aehr to capture a larger market share. Erickson emphasized the strategic fit, citing Incal's established relationships with AI industry leaders and its ability to meet the growing demand for AI and other high-power semiconductors.
The terms of the deal involve Aehr acquiring all outstanding capital stock of Incal Technology, Inc. for $14 million in cash and 552,355 shares of Aehr common stock, priced at the average closing price for the ten trading days preceding the agreement. Incal reported trailing 12-month revenue of approximately $12 million for the period ending June 30, 2024. The transaction is expected to be immediately accretive to Aehr's earnings and is set to close within the next 60 days, pending customary closing conditions.
Incal's President and CEO Alberto Salamone expressed enthusiasm about joining Aehr and leveraging its manufacturing capabilities and global resources to serve Incal's customers better. Both companies' boards have approved the acquisition, which is not contingent upon any financing conditions.
This strategic acquisition comes at a time when the demand for high-quality, reliable semiconductors is increasing due to their use in various applications, including electric vehicles, renewable energy, and computing infrastructure. Aehr's existing product line includes the FOX-PTM family of test and burn-in systems designed for a range of semiconductor devices.
In other recent news, Aehr Test Systems, a global provider of semiconductor test and burn-in equipment, has secured orders worth $12.7 million from a key customer in the electric vehicle sector for multiple WaferPak™ Contactors. The company has also reported a strong fiscal 2024 with a fourth-quarter revenue of about $16.6 million and a GAAP net income of roughly $23.8 million. For the full fiscal year 2024, Aehr announced revenues of around $66.2 million and a GAAP net income of nearly $33.1 million. These figures surpass both the company's previous guidance and analyst consensus.
Despite a slowdown in electric vehicle demand impacting product orders, Aehr achieved record annual revenue, driven largely by the wafer level test and burn-in of silicon carbide power semiconductors used in EVs. The company's president and CEO, Gayn Erickson, anticipates continued revenue contributions from silicon carbide but also expects a diversification of bookings and revenue streams.
In addition to these developments, Aehr Test Systems experienced a significant year-over-year decline in its third-quarter revenue due to delayed customer orders and a reduction in semiconductor capital spending. Despite these challenges, Aehr Test Systems remains optimistic about its long-term prospects, citing opportunities in markets like silicon carbide, gallium nitride, silicon photonics, and memory semiconductors. These are some of the recent developments surrounding Aehr Test Systems.
InvestingPro Insights
In light of Aehr Test Systems' (NASDAQ:AEHR) recent strategic acquisition of Incal Technology, investors may find the following insights from InvestingPro valuable for assessing the company's financial health and market position.
An InvestingPro Tip indicates that AEHR holds more cash than debt on its balance sheet, suggesting a strong liquidity position that could support the company's growth initiatives, including the recent purchase of Incal Technology. Furthermore, analysts have revised their earnings downwards for the upcoming period, which may reflect market skepticism about immediate financial benefits from the acquisition.
InvestingPro Data shows AEHR's market capitalization stands at $486.35 million, with a P/E ratio of 31.19. This valuation comes in the wake of significant price movements; the stock has experienced a return of 32.39% over the last week. Additionally, AEHR's revenue growth for the last twelve months as of Q3 2023 was 14.14%, indicating a solid top-line expansion that could be further bolstered by the integration of Incal's high-power test solutions.
For investors looking for more comprehensive analysis and additional InvestingPro Tips, including insights on AEHR's stock price volatility, valuation multiples, and profitability predictions for the year, visit https://www.investing.com/pro/AEHR. There are 16 more InvestingPro Tips available, which could provide a deeper understanding of the potential risks and rewards associated with AEHR's stock. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, adding even more value to your investment research.
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