While the artificial intelligence industry has been a big winner from the bumper financials delivered by semiconductor company NVIDIA last month, shareholders of semiconductor equipment firm Revasum (ASX: RVS) are still waiting to see the share price gains delivered by peers. The wait could take another two weeks, with Revasum extending its voluntary suspension in the hope of securing a binding acquisition offer.
The voluntary suspension comes as the Company continues its strategic process with hopes of securing a takeover offer being overseen by investment bank B Riley Financial.
Their search for bidders has garnered multiple indications of interest regarding a potential acquisition. However, one interested party has requested an additional week or two to complete its due diligence before presenting an indicative offer to Revasum. In response, the Company has granted this request, demonstrating its commitment to exploring all potential avenues.
“While there is no certainty that the strategic process will yield acceptable offers or result in a successful transaction, we firmly believe that pursuing this path is in the best interests of all our shareholders,” said Revasum in their statement.
In parallel with the strategic process, Revasum has been streamlining its cost structure, including the implementation of employee furloughs, a temporary redundancy where employee leave is utilised while staff are encouraged to seek new employment.
Additionally, Revasum has faced delays in receiving payments from customers and is actively working on securing additional financing and renegotiating forbearance terms with its creditors. These efforts are deemed critical to the Company’s continued financial viability.
In a bid to incentivise the successful sale of the Company, Revasum has entered into management incentive and retention arrangements with its Chief Executive Officer and Chief Financial Officer. These arrangements entail incentive compensation for the executives in the event of a successful sale transaction, aligning their interests with those of shareholders.
The voluntary suspension is expected to remain in effect until Revasum makes significant announcements concerning funding, updates to the strategic process, or other material developments.
Revasum is a global supplier of semiconductor technology and equipment. The Company specialises in advanced solutions for substrate processing, including grinding, polishing, and chemical-mechanical planarization (CMP). This technology is used by clients across the semiconductor industry, enabling the production of high-performance semiconductor devices.
One of Revasum’s standout features is its expertise in CMP, a crucial process in semiconductor manufacturing for achieving precise and uniform surfaces on wafers. The Company’s CMP systems offer advanced control and customisation options, allowing semiconductor manufacturers to optimise their production processes for enhanced performance and efficiency.
For the 12 months ended 31 December 2023, Revasum reported preliminary unaudited revenue of USD $16.7 million which represented a 13.1% increase on the previous year.
$3.3 million in negative operating cash flow, however, has put strain on the business which as of 31 December 2023 had $0.4 million of cash available to them, hence the engagement of B Riley Financial to either sell assets within the Company or assist with recapitalisation.
As Revasum continues to navigate its strategic process, stakeholders eagerly await further updates on potential developments of this bidder whose interest appeared legitimate enough to extend the suspension of Revasum shares.
Mitch Korver is a Business Writer focused on high-growth companies listed on the ASX in the small and medium cap space.
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