Monday, February 22, 2016

Seeking Alpha: Cascade Microtech Being Reformed

It's been a while since I've written about either Cascade Microtech (NASDAQ:CSCD) or FormFactor (NASDAQ:FORM), but until very recently, these companies and stocks were performing more or less how I expected. Cascade has continued to leverage its strong position in R&D-driven engineering probe stations and cards, while also benefiting from RF chip volume growth in its production probe business. FormFactor hasn't been as impressive, as the company has struggled to find gross margin leverage despite its strong share in system-on-chip (or SoC) and DRAM probe cards.

The future of these two companies is now even more intertwined, as the companies announced an agreement on February 4 that will see FormFactor acquire Cascade in a cash and stock deal that was worth a little more than $21 at the time of the deal (and about $1 less now). While I don't want to underplay the integration and execution risks that will accompany this deal, not to mention the regular volatility of chip production/demand, FormFactor shares seem undervalued on the combined potential of the two businesses.

Follow this link for the full article:
Cascade Microtech Being Reformed

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