Status: Withdrawn; Abandoned
Acquirer: Unic Capital Management Co., Ltd. (China); China Integrated Circuit Industry Investment Fund Co. (China)
Acquired: Xcerra, Inc. (US)
Value: Approx. US$580 million
Industry: Semiconductor
Posted on March 1, 2018
UPDATE: On February 22, 2018, Xcerra announced that it was terminating its Merger Agreement with Unic Capital Management and China Integrated Circuit Industry Investment Fund. (See Xcerra Corp. Form 8-K, Feb. 22, 2018, SEC Filing.) On August 4, 2017, “Unic Capital subsequently assigned all of its rights under the Merger Agreement to Hubei Xinyan Equity Investment Partnership (Limited Partnership) . . .” (Id.) Xcerra stated that “[a]fter careful review of feedback received from CFIUS that approval of the Merger is highly unlikely and further discussions between [Xcerra] and [Hubei Xinyan Equity Investment Partnership], the parties determined to cease efforts to seek CFIUS clearance and entered into a Termination Agreement, dated February 22, 2018 . . .” (Id.; see also Termination Agreement, Xcerra Corp. Form 8-K, Ex-10.1, Feb. 22, 2018, SEC Filing.) “Neither the Company nor Parent will incur any termination fees in connection with the termination of the Merger Agreement.” (Id.)
UPDATE: On December 21, 2017, Xcerra Corporation and Hubei Xinyan Equity Investment Partnership (Limited Partnership) “submitted a request to withdraw and re-file their joint voluntary notice to CFIUS . . . to allow more time for review and discussion with CFIUS” in connection with the April 7, 2017 Merger Agreement with Unic Capital Management Co., Ltd. and China Integrated Circuit Industry Investment Fund Co., Ltd. (Xcerra Corp. Form 8-K, Dec. 21, 2017, SEC Filing.) On August 4, 2017, Unic Capital subsequently assigned all of its rights under the Merger Agreement to Hubei Xinyan Equity Investment Partnership (Limited Partnership), which is a “buy-out investment fund established solely for the purpose of engaging in the transactions contemplated by the Merger Agreement.” (Xcerra Corp. Schedule 14A, August 7, 2017, SEC Filing.) Unic Capital is the controlling shareholder of Hubei Xinyan Equity Investment Partnership’s general partner and China Integrated Circuit Industry Investment Fund Co., Ltd. is the largest limited partner of Hubei Xinyan Equity Investment Partnership. (Id.) “Once CFIUS grants the request and accepts the joint voluntary notice, it will commence a new 30-day review period, which may be followed by a 45-day investigation period.” (Id.)
Posted on April 11, 2017
Status: Upcoming/New Filing
On April 7, 2017, Xcerra Corporation, a Massachusetts corporation entered into an Agreement and Plan of Merger with Unic Capital Management Co., Ltd. (an affiliate of SINO IC Capital Co. Ltd.) and China Integrated Circuit Industry Investment Fund Co., Ltd., all private Chinese investment companies, providing for the merger of a wholly owned subsidiary of Unic Capital Management with and into Xcerra, with Xcerra surviving as a wholly owned subsidiary of Unic Capital Management. (See Xcerra Form 8-K, Apr. 10, 2017, SEC Filing; Agreement and Plan of Merger, Xcerra Form 8-K, Ex-2.1, Apr. 10, 2017, SEC Filing.) Xcerra is the parent company of four brands in the semiconductor and electronics manufacturing industries (atg-Luther & Maelzer, Everett Charles Technologies, LTX-Credence and Multitest) that combined offer a “broad spectrum of semiconductor and PCB test expertise that drives innovative new products and services, and the ability to deliver to customers fully integrated semiconductor test cell solutions.” (Xcerra Press Release, Form 8-K, Ex-99.1, Apr. 10, 2017, SEC Filing.) Unic Capital, an affiliate of Sino IC Capital, was founded in 2016 and focuses on long-term investments in semiconductor and other advanced technology industries. (see id.) Sino IC Capital was established in August, 2014, with RMB138.7 billion (equivalent to approximately US$20.9 billion) and it is the fund manager and a shareholder of government backed China IC Fund. (see id.; see also Shanghai Daily news article, Mar. 16, 2016.) Finally, the China Integrated Circuit Industry Investment Fund Co. was reportedly founded by the Ministry of Industry and Information Technology and Ministry of Finance and has been described “as the main vehicle used by the [Chinese] state to drive the development of the domestic semiconductor industry, which continues to rely heavily on imported chips amid the country’s vast electronics manufacturing supply chain.” (South China Morning Post, China’s chip industry bolstered by acquisitions worth US$6.61 billion by government-backed fund, Mar. 30, 2016.)
According to the Merger Agreement, a Committee on Foreign Investment in the United States (CFIUS) Clearance is a condition to closing (Section 7.1(b)(iii)), but Unic Capital Management is not required to accept any mitigation that could “reasonably be expected to reduce the reasonably expected benefits of the Merger . . . in an amount that is financially material relative to the value of the Company . . .” (Section 7.1(g), Agreement and Plan of Merger, Xcerra Form 8-K, Ex-2.1, Apr. 10, 2017, SEC Filing.) The merger agreement specifically calls out that Unic Capital Management is not required to accept mitigation that “would adversely affect the LTX-Credence and/or ECT businesses or material product lines in any material way.” (Id.) LTX-Credence and Everett Charles Technologies (ECT) businesses specialize in advance test equipment for semiconductors. Unic Capital Management will also be required to pay a termination fee of US$22.8 million if the deal is terminated for failure to obtain CFIUS Clearance, among other reasons. (See Xcerra Form 8-K, Apr. 10, 2017, SEC Filing.)