The sale of Israeli company Advanced Dicing Technologies (ADT) to a Chinese company has been completed. Tel Aviv Stock Exchange (TASE)-listed venture capital fund Teuza, which held 18.9% of ADT's shares, reported that it had received $5.9 million (NIS 21 million) for its shares, reflecting a $31 million value for the company.
ADT develops, manufactures, and markets cutting machines and blades for dicing and separating components in the semiconductor and electronic components industry. The company specializes in the development and manufacturing of system for cutting silicon-based chips, package singulation, and microelectronic components (MECs). Most of its production is from dicing machines. In its main market, ADC manufactures and sells machines for precision dicing of electronic components, and supplies equipment to manufacturers of various types of electronic components. ADC, founded in the preceding decade on the ruins of the dicing equipment division and blade division of international company Kulicke and Soffa (K&S) in Israel, has a plant in the Yokne'am industrial zone and subsidiaries in the US, China, and Taiwan.
The buyer is a public Chinese conglomerate with activity that complements and is strategic for ADT's future development. "This is a strategic measure of supreme importance for the company's future… The global market of the semiconductor and microelectronic industries is continuing its rapid development and growth, and is posing new challenges to us. In addition, the current global business environment and the volatility in the market are also confronting us with difficult challenges," ADT CEO Yaron Barkan said.
"In order to successfully contend with these trends in the market and the world, the sale of ADT is a necessary step for continuing its growth and become a leading company in the global market. China is a country with the world's highest growth rate in all matters pertaining to our markets, including the dicing market. Our combining with strategic Chinese partners will enable us to substantially increase our market share in China, and to become a leading player in this market, and be far more important in the global market," Barkan added.
The leading shareholder in ADT is Yitzhak Zoran with 30.8% of the company's shares, while Teuza holds 18.9%. ADT tried to holding an IPO on the TASE in the middle of the preceding decade, but withdrew the measure twice because of market conditions and inadequate demand.
Teuza's reports show that it invested $2.53 million in ADT: $1.3 million in cash and $1.23 million in share swap deals.
"This is Teuza's second exit this year, after the sale of medical devices company Sealantis, which generated NIS 20 million in cash and a larger amount in royalties," Teuza CEO Avi Kerbs said.
Teuza's market cap is NIS 51 million, following a 5% rise in its share price since the beginning of 2019. Teuza explained today that the Chinese market, which formerly focused on production of simple products, has been switching in recent years to production of sophisticated knowledge-intensive products.
"The electronics and semiconductor industry is one of the fastest growing sectors in China. The acquisition of ADT fits in with this trend, and shows the acquiring company's positive impression of the high technological level of the Israeli company's products. The acquisition was made following a regular business development process in the Chinese market and the finding of a relevant buyer, while obtaining government approval for the deal," Teuza stated.
Published by Globes, Israel business news - en.globes.co.il - on October 22, 2019
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