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Verigy and LTX-Credence to Merge

19 November 2010 - Verigy and LTX-Credence Corporation announced that they have entered into a definitive merger agreement that would create a semiconductor test company with the scale and presence to provide comprehensive solutions to customers across most major semiconductor market segments. The combined company to be called Verigy, will feature a portfolio of leading semiconductor test systems that address the requirements of the wireless, graphics, computing, automotive, industrial, and entertainment markets.

With an expanded product portfolio, strong share position in target segments and large support network through a direct support team and key strategic partners such as Spirox in Taiwan and China, the new Verigy expects to be well-positioned to deliver significant value to customers, shareholders and employees. By combining two of the industry's most highly skilled and experienced R&D teams under a common focus and direction, Verigy anticipates creating a stronger, more competitive innovator of test cell solutions that enable semiconductor manufacturers to meet time-to-market and cost-of-test demands.

Verigy president and COO, Jorge Titinger, and LTX-Credence president and CEO, David Tacelli, will serve as co-CEOs of the new company, which will be headquartered in Singapore with U.S. headquarters in Cupertino, California. Verigy chairman and CEO, Keith Barnes, will continue as the chairman of the board of directors, which will be comprised of 12 members, seven designated by Verigy and five by LTX-Credence. Furthermore, to facilitate the leadership change, Keith Barnes will transition from Verigy CEO to Verigy chairman of the board of directors as of Dec. 31, 2010, and Jorge Titinger will be promoted to Verigy CEO and president.

"The two companies share a long legacy of innovation in test solutions that meet customers' technology needs and enable them to maximize profitability and competitiveness," said Keith Barnes, Verigy chairman and CEO. "By joining forces, we expect the combined scale to strengthen our global presence, realize significant synergies and provide substantial benefits to our customers, shareholders and employees."

"Verigy has a well-established presence in the high-performance digital, complex mixed-signal and RF-SOC segments while LTX-Credence has a broad SOC market footprint and expertise in cost-optimized solutions," said Jorge Titinger, Verigy president and COO. "We expect the combination will enable the new Verigy to drive sustainable long-term growth and shareholder value through the expansion of our product and technology portfolio as well as our existing customer relationships."

"Strategically, the complementary fit of Verigy and LTX-Credence makes us ideal merger partners, and we believe this combination will position the new Verigy for market leadership in the semiconductor test industry," said David Tacelli, LTX-Credence president and CEO.

The combined company also expects to realize substantial synergies within one year of the close of the deal, with annual cost savings expected to reach at least $25 million, primarily from increased efficiencies in manufacturing and reduced operating expenses.

The transaction is subject to the approval of shareholders from both companies as well as other customary closing conditions and regulatory approvals. The companies expect the transaction to close in the first half of calendar 2011.

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