Credence Systems and LTX, both providers of automated test equipment (ATE), have entered into a definitive agreement to combine the two companies in a tax-free, all-stock merger of equals. Credence shareholders will receive shares of LTX common stock based on an exchange ratio that will be determined at the closing of the merger to cause Credence shareholders to own 50.02% of the outstanding shares of the combined company and LTX shareholders to own 49.98% of the outstanding shares of the combined company.

The new company will address the test requirements of the wireless, computing, automotive and entertainment market segments. Lavi Lev, President and CEO of Credence, will become Executive Chairman of the combined company for a transitional period following the merger. David Tacelli, CEO and President of LTX, will become CEO and President. Te companies expect the transaction to be completed by the end of September 2008.

The twelve-month sales 2007 at LTX were $147.6 million, the net loss was $10.7 million. For fiscal 2007, net sales at Credence were $461.1 million. The company achieved a net profit of $12.5 million.