Will Quickturn Buy Return Long-term Gain?

I have mixed feelings about DDi’s pickup of Coretec. On one hand, Coretec was finding it extremely difficult making it as a small yet publicly held company. Its sales had slipped from C$92 million in 2006 to C$81.4 million in 2008 — an 11.5% drop — and were on a run-rate of $72.7 million this year. Worse, it was still seeing sequential declines through the September quarter, while competitor DDi has begun the upward revenue climb. (TTM, for the record, has not seen sequential growth in 2009 either.) Its last quarterly net profit was the fourth quarter 2006. And with no cash on hand, its hands were severely tied. All of which might explain why Coretec’s CFO position has been something of a revolving door for years.

DDI, on the other hand, has turned the corner after years of questionable acquisitions, two bankruptcies, numerous lawsuits, and an internal culture considered by many to be wanton and reckless. Its turned a profit all three quarters this year — which is impressive. That said, DDi has just $25 million in cash itself, and PWB fabrication is a cash-intensive business, with lots of ugly cycles. While I suspect DDi saw an opportunity to beat some competitors to the punch by bidding on Coretec now, I can’t help but think that had they waited, they might have picked up the company more cheaply. And I’d hate to see several years of work undone by a deal gone bad.

On a side note, Coretec CEO Paul Langston is a serious-minded, second-generation PCB guy and I know the difficulties of running the company over the past several years have weighed on him. We wish him the best.

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About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

One thought on “Will Quickturn Buy Return Long-term Gain?

  1. Langston was a tyrant…emporer’s new clothes kinda guy. Drove a Suburban or Cadlillac all the time (kinda gives insight into his ideas about what quality is all about). He and his HR imp sent many casualties to the wayside during his tenure. Funny funny guy Langston… hey Langston ‘don’t puck up this time’..just for old times sake Paulie boy.

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