(Adds details about Sino IC's shareholders, closing stock
NEW YORK, April 10 (Reuters) - A unit of a large
semiconductor investment fund linked to the Chinese state has
agreed to buy U.S. semiconductor testing company Xcerra Corp
for $580 million in cash, the companies said on Monday.
The deal is subject to approval by the Committee on Foreign
Investment in the United States (CFIUS), a government panel that
reviews acquisitions by foreign entities for potential national
security risks. CFIUS has cracked down on technology deals
related to the semiconductor industry.
The buyer is Unic Capital Management, a subsidiary of Sino
IC Capital that was founded last year, the companies said in a
news release. Sino IC Capital was established in August 2014 and
has approximately RMB 138.7 billion ($20.9 billion) in funds
under management to invest in the semiconductor space.
Unic is paying $10.25 per share in cash for Xcerra. Xcerra
shares gained 7 percent to close at $9.63 on Monday. That was
still below Unic's offer price, indicating some market
skepticism about the deal closing.
The deal is expected to close by year-end.
Chinese suitors have faced intense scrutiny from regulators
in their pursuit of U.S. chip makers, resulting in some failed
deals in recent years.
According to the website of a Sino IC shareholder, China
Development Bank Capital, Beijing-based Sino IC has at least
eight shareholders and was created with the support of the
“leaders in the general office of the State Council and the
relevant ministries.” The State Council refers to the Chinese
The “overall idea” of Sino IC's investment strategy is to
focus on the national development of China’s integrated circuit
industry and “ease the investment bottleneck” in the sector, the
Of the eight listed shareholders of Sino IC, at least seven
are owned by or affiliated with the Chinese state, according to
the websites of the companies and Chinese corporate filings.
Xcerra declined to comment when asked about Sino IC's
Massachusetts-based Xcerra designs and manufactures
equipment to test semiconductors and circuit boards. It does not
make semiconductors. It is able to seek other buyers for the
next 35 days under terms of the merger agreement.
Xcerra was advised by Cowen and Company LLC and Latham &
Watkins LLP. Sinoc IC was advised by Grant Thornton
International and Wilson Sonsini Goodrich & Rosati.
Sino IC shareholders include China Development Bank Capital,
a unit of China Development Bank, a state-owned
Chinese development bank; and China Mobile Ltd,
China’s state-owned wireless carrier.
(Reporting by Liana B. Baker and Koh Gui Qing in New York;
Editing by Matthew Lewis)