Eagle Test Sells for a Profit

Headquartered in Buffalo Grove, Illinois, Eagle Test Systems, Inc. ( EGLT ) designs, manufactures, sells and services automated test equipment (ATE) for the semiconductor industry. The company’s test systems test analog, mixed-signal, and RF (Radio Frequency) semiconductor devices.

Teradyne, Inc. (TER - Snapshot Report) has offered to acquire Eagle Test Systems for $250.0 million. Teradyne values EGLT at $15.65 a share, representing a 10.4% premium to Friday's closing price of $14.18. The firm recently also agreed.

EGLT is trading at 13.7x multiple to our 2009 estimated earnings (P/E). EGLT's business and operating results depend significantly on the level of capital expenditures by companies in the semiconductor industry. The balance sheet has improved every year since 2004 as cash has climbed to $112 million. The stock should trade at or near its $15.65 acquired price. We reiterate our Buy recommendation.

Read the full analyst report on EGLT