KUALA LUMPUR (March 10): JF Technology Bhd (KL:JFTECH), the manufacturer of test contacting solutions for global integrated circuit makers, has entered an agreement with Spire Manufacturing Inc to acquire Q3 Probe Pte Ltd for US$1.36 million (RM6 million).

In a statement on Monday, JF Technology said its unit JF International Sdn Bhd has proposed the agreement to acquire 80% equity in Q3 for US$1.36 million, which is expected to be completed by the end of April.

The remaining 20% equity interest will be acquired by Dec 31, 2027.

The acquisition is structured with a three-year performance earn-out of US$90,670 (RM401,000) annually at the end of each calendar year, totalling US$272,010 (RM1.2 million), contingent on meeting the profit guarantee by the vendor.

Q3, a Singapore-based probe card manufacturer, is fully owned by US-based Spire Manufacturing, which specialises in printed circuit boards design and assembly, probe card manufacturing, and machined parts for various industries, such as semiconductors to optics, wireless and broadband, and light-emitting diode (LED) lighting.

Q3 posted a net profit of S$231,000 (RM767,000) for the financial year ended Dec 31, 2023. Its front-end wafer testing specialisation is expected to strengthen the JF Technology position across the entire semiconductor value chain, from front-end to back-end (final integrated circuit testing).

"The acquisition of Q3 brings excitement to the group as it creates strong synergies and enhances the vertical integration within our test engineering solutions business,” said JF Technology managing director Datuk Foong Wei Kuong.

"Q3 is currently supplying patented products to the market, and we have plans to establish a production line in Malaysia to serve our strong customer base of more than 200 multinational corporations," said Foong.

"Upon completion of the acquisition, we believe that the group will be the only provider in Malaysia with such a comprehensive probe card product line. Looking ahead, Q3’s prospects are bright underpinned by the strong demand from electric vehicle applications,” he added.

Shares of JF Technology closed down 1.5 sen or 2.9% at 49.5 sen on Monday, with a market capitalisation of RM458.9 million. The counter has declined 38.89% this year.