Teradyne to acquire GenRad

In a move geared toward expanding its presence in the circuit-board test and inspection market, test equipment provider Teradyne announced plans to acquire GenRad yesterday for $177 million in stock.

Under terms of the deal, GenRad, which produces electronic automatic test equipment and software, will be acquired in an all-stock transaction. Each share of GenRad common stock will be converted into 0.1733 shares of Teradyne common stock.

The transaction will exclude GenRad’s Diagnostic Solutions business unit, which is expected be sold separately to a British investment consortium for the unit, according to GenRad.

The deal was a strategic opportunity for both companies, according to Richard M. Miles, vice president of global communications for GenRad.

“Our product lineups have almost no overlap. Teradyne’s strength is in the semiconductor test space; ours is in the printed circuit board test space,” Miles said. “You put the two together, and you’ve got a complete solution for manufacturing, either OEM or contract manufacturing.”

Based on Teradyne’s $35.10 closing price on Aug. 1, the deal is estimated to be worth about $260 million, including the assumption of $85 million of GenRad’s debt.

Teradyne will keep revenue for the GenRad business--about $255 million in 2000--following the close of these transactions.

GenRad will operate as one of Teradyne’s divisions, but it has not been determined if the GenRad name will be maintained, Miles said.

“[Teradyne] has a division now that is focused on low-end in-circuit test, and we have a high-end in-circuit test product, so [GenRad] will fold into that division,” Miles said.

GenRad Chairman, President and CEO Robert M. Dutkowsky will manage the combined Teradyne circuit-board test and inspection division.

The deal should be finalized in the fourth quarter, pending approval of GenRad and Teradyne shareholders and regulators.