Irvine, CA--Newport (Nasdaq: NEWP) is selling the assets of its Micro Robotics Systems advanced packaging business (MRSI) to a private investment group led by the local management team. In the12 months ended September 28, 2013, MRSI generated revenue of approximately $12 million, although the business did not contribute materially to Newport's operating income or cash flows.
Robert Phillippy, Newport's President and Chief Executive Officer, said: "The MRSI business is focused on the development and manufacturing of turn-key die bonding and dispensing systems. Our focus is on providing solutions that leverage lasers, optics, and photonics technologies, and the MRSI business no longer fits within Newport's long-term strategy. Therefore, we believe it is in our best interest to sell the business."
Under the terms of the proposed transaction, Newport would receive $5.35 million in cash at closing and an unsecured promissory note in the principal amount of $0.65 million, with a term of seven years and an interest rate of 5%. The buyer is expected to sublease the facility from Newport and retain substantially all of the employees. The parties are currently negotiating the definitive agreements relating to the transaction, which will be subject to normal closing conditions and is expected to be finalized before the end of the year.
MRSI's net assets at the end of the third quarter of 2013 were approximately $9.5 million and Newport will record a charge of $4.5 million in the third quarter of 2013 relating to the pending divestiture, including transaction costs of $0.4 million.