Data I/O announced the execution of a letter of intent to acquire a semiconductor handling and packaging solutions manufacturer in a transaction valued at approximately $23 million, a move the company said is expected to nearly double annual revenue while expanding its higher-margin service offerings.
The acquisition marks a significant strategic shift for Data I/O as the company accelerates its transition toward service-based revenues and strengthens its intellectual property portfolio. The combined company is expected to broaden its reach across semiconductor companies, electronics manufacturing services providers, and OEM customers.
The transaction is expected to be accretive to earnings and cash flow following closing. Data I/O said the deal aligns with its previously announced strategy to expand its platform capabilities across services, programming, and testing solutions.
William Wentworth, President and CEO of Data I/O Corporation, said the acquisition will significantly expand the company’s suite of products and services while helping diversify revenue streams beyond automotive electronics.
The company also said the acquisition will accelerate its entry into on-site Programming-as-a-Service (PaaS), which it recently identified as a cornerstone initiative for “The NEW Data I/O.”
Under the terms of the proposed transaction, Data I/O expects to fund the acquisition through a combination of cash and equity. Up to $3 million of the consideration may be paid in company stock tied to the future performance of the acquired business. The sellers are expected to receive up to 15% of the transaction consideration in Data I/O shares.
The transaction is expected to close before the end of the company’s third quarter, subject to definitive agreements, financing arrangements, regulatory approvals, due diligence, and customary closing conditions. Additional financial terms were not disclosed.
Benchmark, a StoneX company, is serving as M&A advisor to Data I/O, while Dorsey & Whitney LLP is acting as legal advisor.
Founded in 1972, Data I/O Corporation develops data provisioning and security deployment solutions used in automotive, IoT, medical, wireless, consumer electronics, and industrial applications.
KEY QUOTES:
“We are incredibly excited to announce this strategic transaction which will broaden Data I/O’s suite of products and services and position the combined company to address a larger, more diverse set of customers, including semiconductor companies, EMS provides and OEMs. We look forward to working diligently to complete this transaction, which fits perfectly into our previously announced strategy of expanding the Data I/O’s platform to include services, programming, and at test.”
William Wentworth, President and CEO, Data I/O Corporation
“This acquisition makes strategic and financial sense, delivering value for customers and stakeholders alike. To this end, the current owners of the business being acquired will receive up to 15% of the consideration in Data I/O stock, demonstrating confidence in the combined business strategy. Importantly, the acquisition significantly adds to our arsenal of programming technology and services, and provides strong diversification of our revenue beyond automotive electronics. This acquisition accelerates our entry into on-site Programming-as-a-Service (PaaS), which is the cornerstone of The NEW Data I/O announced last month.”
William Wentworth, President and CEO, Data I/O Corporation
