Data I/O has completed its acquisition of V-TEK and A&J Programming in a transaction valued at approximately $23 million, expanding the company’s semiconductor automation capabilities and accelerating its Programming-as-a-Service strategy.
The purchase price consisted of $20 million in cash and $3 million in Data I/O common stock. A portion of the cash consideration came from a private placement that closed shortly before the transaction.
V-TEK and A&J Programming are based in Mankato, Minnesota, and provide semiconductor handling automation, test, inspection, packaging, and programming services. Following the acquisition, V-TEK will operate as a subsidiary of Data I/O.
Data I/O said the transaction is expected to more than double consolidated revenue and reduce the company’s reliance on cyclical capital equipment markets and the automotive industry.
The combination also broadens Data I/O’s exposure to end markets including data centers, artificial intelligence, photonics, industrial automation, medical, military, aerospace, and defense.
A key component of the transaction is expanding Data I/O’s Programming-as-a-Service offering. V-TEK’s existing programming operations and A&J Programming’s service capabilities are expected to complement Data I/O’s existing programming and security provisioning technologies.
The companies also expect to benefit from sales synergies across product lines and channel partners, operating leverage, lower-cost domestic manufacturing, expanded tooling capabilities, and a broader global distribution and service footprint.
Data I/O plans to keep investing in automation solutions for programming and test while shifting more of its revenue mix toward software and services.
The transaction also combines three complementary areas of expertise. V-TEK contributes handling, testing, inspection, and packaging systems, A&J Programming adds service capabilities, and Data I/O brings programming and security technology.
Data I/O believes the integrated platform will let it offer customers more modular, customized systems, flexible service models, and broader on-site support.
StoneX Financial served as M&A advisor to Data I/O, while Dorsey & Whitney served as legal advisor. Sperry Mitchell & Company advised V-TEK, and Blank Rome served as legal counsel.
KEY QUOTES:
“Closing this acquisition marks the first significant milestone set two years ago to expand markets we serve and expand the lines of revenue to make Data I/O a more resilient, profitable and growth-oriented company. The NEW Data I/O becomes real and is materially impactful to its financial performance and growth outlook. The acquisition is expected to be accretive to our existing operations. With the acquisition of V-TEK, we will diversify our revenue streams, reducing our reliance on the cyclical nature of the capital equipment markets. We have minimized our reliance on the automotive industry, more than doubled our revenue consolidated, which expands Data I/O into markets such as data center, AI, photonics, industrial automation, medical, military, aerospace and defense. We will continue to innovate and invest in new automation solutions for programming and test. V-TEK’s existing programming business let us accelerate Programming-as-a-Service. Just as important, we are shifting revenue mix adding software and services, which will play a more significant role in next year’s growth plan.”
William Wentworth, President And CEO Of Data I/O Corporation
“We are proud of what the V-TEK team has built, and we believe Data I/O is the right partner to take the business to its next stage. Our decision to take up to $3 million of the purchase price in Data I/O stock, reflects our conviction in the combined company. With broader end markets, a growing service business and meaningful new scale, we believe there is the potential for significant upside ahead and look forward to participating in it as shareholders.”
Bill Karol, On Behalf Of The Selling Ownership Group
“Each of our three companies brings a distinct strength, and together they are covering the data provisioning supply chain. V-TEK’s handling, test, inspection and packaging systems, A&J Programming’s service expertise and Data I/O’s programming and security technology fit naturally together. That combination lets us expand our solutions with modular and customized systems, flexible service offerings, and global distribution and on-site support. It’s a stronger offering for customers and a real growth platform for the business.”
Mitch Jacobs, President Of V-TEK And Senior Vice President Of Data I/O Corporation
