This proposed merger is clearly a direct response to the recently completed LTXX-CMOS deal, which combined two direct competitors to both EGLT and TER in the "advanced testing equipment" (ATE) niche of the semiconductor industry. The fact that the LTXX-CMOS transaction raised absolutely no competition-related regulatory interest virtually assures that this deal will also be a non-issue for the FTC, or any other regulator.
Borrowing from the LTXX-CMOS file, the following chart shows the approximate market share data for the ATE segment:
ATE Market Share (c. 2005)
1. Advantest - 50%
2. Teradyne - 17%
3. Verigy - 14%
4. Credence - 7%
5. Others - 12%
This can be narrowed down the following niche overlap:
ATE, Linear Mixed-Signal IC
1. Advantest
2. Agilent Technologies
3. B F Goodrich Aerospace
4. Credence/LTX
5. DiagnoSYS Systems
6. Eagle Test Systems
7. GenRad
8. Geotest
9. Integrated Measurement Systems
10. LTX Corp
11. MiNT Systems
12. Racal Instruments
13. Schlumberger
14. Symtx
15. SZ Testsysteme
16. Teradyne
17. TMT
18. TRICOR Systems,
19. TSK America
20. Y-tek
It should be noted that the above list comes from the 2001 IMSC-CMOS deal. This list has obviously shortened due to consolidation over the last seven years. Nevertheless, this combination certainly does not threaten the competitive landscape in the ATE market -- on the contrary, regulators will likely view this as a positive development from the perspective of offering greater competition to Advantest and Credence in this rapidly consolidating industry. In short, this transaction, like the LTXX-CMOS deal, is very much a candidate for HSR early termination.
With respect to the SEC review, this deal already has the advantage of being all-cash. That, combined with EGLT's initial S-1 clearing almost exactly two years ago (9/14/06), suggests that SEC consent will be obtained very quickly in this case -- very likely via proxy review waiver.
Assuming the first proxy is filed in late-September, or very early October, it is entirely possible that the EGLT shareholder meeting and close can occur during by the third week of November 2008.
