The deal is composed of an initial payment in cash and shares to a value of about $570 million plus an additional consideration of up to a potential maximum of $285 million. This will be dependent on Heptagon's financial results over the 2017 fiscal year. It is also the latest and largest of a series of "tuck-in" acquisitions intended to build up AMS's position as a leader in sensor technologies.
Heptagon is a high-end supplier of optical packaging services and optical sensing modules. The company is currently focused on the consumer market and is a supplier into mobile phones. It has time-of-flight depth-measuring solution through its 2014 acquisition of Mesa Imaging AG of Zurich, Switzerland. Heptagon itself has its R&D center in Rueschlikon, Switzerland and has more than 830 employees including around 120 engineers and 500 manufacturing staff.
Heptagon has an annual revenue of about $90 million and is loss-making but this is partially due to an investment of more than $250 million in manufacturing capacity planned for 2016 and 2017, AMS said. Heptagon expects substantial revenue growth to start in 2017 due to a confirmed customer commitment of the additional capacity.
AMS announced the planned acquisition alongside its third quarter financial results at the end of October.
In 3Q16 AMS had group revenues of €146.7 million (about $160 million) down 4 percent from €153.0 million in the same quarter 2015. The net result for the third quarter was €55.9 million compared to €34.0 million in the same period a year before.
However, AMS said the fourth quarter would be "muted" due to a negative development at a specific customer in the consumer end market and a production yield issue in an industrial product line.
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