Investing.com — Amplitech Group Inc (NASDAQ:AMPG) shares rose more than 20% after it announced Friday afternoon that it will acquire Spectrum Semiconductor Materials.
AmpliTech is set to pay $8 million in cash for the semiconductor components company. In addition, an extra $1.5 million will be held in an escrow account until December 2022 to fund any purchase price or other adjustments, while they will also grant Spectrum 188,442 restricted shares of AmpliTech common stock.
Commenting on the deal, AmpliTech CEO Fawad Maqbool said: “With Spectrum, we will add a well-managed, growing business with a long-term track record for high quality and excellent customer service and the ideal distribution platform for the launch of our MMIC chip solutions.
“This transaction will allow us to more than triple our current annual revenue run rate, while also being immediately accretive to our bottom line.”
AmpliTech said Spectrum is on track to achieve an unaudited 2021 revenue of between $10 million and $11 million, while AmpliTech’s revenue for the past four quarters was $3.5 million.
The deal will help expand AmpliTech’s technical and management expertise and distribution reach, with Spectrum a worldwide authorized distributor that has been around for over 30 years. AmpliTech explained that it sees the potential of Spectrum as a distribution platform in various regions for its new line of monolithic microwave integrated circuit (MMIC) chip designs.
“Spectrum brings us a highly satisfied, long-term, and global customer base with excellent penetration in our core end markets of aerospace, defense, automotive, and computing, along with a deep Silicon Valley presence, to support the launch of MMIC chip solutions we plan to bring to market by the end of Q1 2022,” added Maqbool.
The deal is expected to close within AmpliTech’s fiscal year 2021.