Cohu To Sell Video Camera Business; Revises Forecast - Quick Facts

(RTTNews) - Cohu, Inc. (COHU) said it has agreed to sell substantially all of its Electronics Division's assets to Costar Technologies, Inc. The purchase price comprises $9.5 million in cash plus up to $0.5 million in contingent consideration. The transaction, which is expected to close in June, is subject to customary closing conditions, including a working capital adjustment.

Upon completion, Costar would sign a three-year lease, subject to certain early termination rights, with Cohu, enabling the business to continue to operate at its current location in Poway, California.

The Electronics unit generated $15.7 million of sales in 2013. Following this transaction, the Electronics Division's financial results would be reported as discontinued operations and Cohu expects a pretax gain of around $4 million.

In addition, the firm is updating its second quarter 2014 guidance, now projecting sales of $70 million - $78 million, non-GAAP gross margin and operating expenses of some 36% and $22 million.