Credence Systems has entered into a definitive agreement to sell its automotive ATE operations in Amerang, Germany, to its test and measurement rival Advantest for $5 million.

The move comes after the California-based company in early June reported an $18.7 million loss for its fiscal Q2 and after Credence in February announced the sale of its diagnostics and characterisation business to DCG Systems.

"In order to achieve our profitability goals, we evaluated all of our operations for opportunities to reduce our logistical footprint and further optimise operational efficiencies. As a standalone entity, we sought a buyer for our Amerang operations that would protect our customers' interests by continuing to support their automotive products," said Lavi Lev, president and CEO of Credence, said in a statement Tuesday.

"Advantest has made this commitment to us and we believe that we have achieved an excellent outcome for our automotive customers while avoiding extensive restructuring," he continued.

"Credence will continue to participate in the automotive market with our current product lines as we actively address the broad and diverse consumer markets that also include wireless, entertainment, and computing with products that deliver the best value to our customers."

In connection with the transaction, employees, manufacturing, and key infrastructure will remain in Amerang but be owned by Advantest, which will take control of the operations' assets, including inventories, spares, plant property and equipment, and associated liabilities.

Advantest will also assume all of the unit's contractual obligations with automotive customers, including those obligations in connection with the Credence Falcon, Piranha, and other legacy automotive product lines, Credence said.

The transaction is expected to close on or before August 31.

By Suzanne Deffree, Managing Editor, News - Electronic News