Divestures

3 Months Ended

Mar. 29, 2025

Asset Retirement Obligation Disclosure [Abstract]

Divestiture

On February 7, 2024, we entered into a definitive agreement to sell our China operations to Grand Junction Semiconductor Pte. Ltd. (“Grand Junction”) for $25.0 million in cash, subject to customary purchase price adjustments, and establish an exclusive distribution and partnership agreement to continue sales and support of our products in the region. The following subsidiaries were included as part of the divestiture: Microprobe Hong Kong Limited, FormFactor Technology (Suzhou) Co. Ltd., Cascade Microtech Singapore Pte, Ltd, and FormFactor International (Shanghai) Trading Co., Ltd. These entities supported both the Probe Cards and Systems segments.

On February 26, 2024, we closed on the sale of the operations in China to Grand Junction and received total consideration of $21.4 million, net of cash transferred and transaction expenses, and after customary adjustments for indebtedness and changes in net working capital. The disposition of the China operations did not meet the criteria to be classified as a discontinued operation in our financial statements because the disposition did not represent a strategic shift that had, or will have, a major effect on our operations and financial results.

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture (in thousands):


	February 26, 2024
Gross purchase price	$	25,000
Working capital adjustment	159
Cash transferred to the buyer at closing	(2,743)
Direct costs to sell	(986)
Fair value of sale consideration, net	$	21,430

The carrying amount of net assets associated with the China operations was approximately $1.2 million. The major classes of assets and liabilities sold consisted of the following (in thousands):


	February 26, 2024
ASSETS
Accounts receivable, net	$	1,174
Inventories, net	3,729
Other current assets	391
Total current assets	5,294
Property, plant and equipment, net	1,283
Goodwill	1,117
Other assets	3,029
Total assets	$	10,723
LIABILITIES
Deferred revenue	$	3,739
Other current liabilities	1,546
Other liabilities	4,283
Total liabilities	$	9,568

As a result of the divestiture, we recognized a pre-tax gain of $20.3 million. We recorded income tax expense associated with the divestiture of approximately $3.3 million.