Trio-Tech Ends Effort to Acquire MQS Inspection

Trio-Tech International said it ended talks to acquire Chicago-based MQS Inspection because a decline in Trio-Tech’s stock price made financing difficult.

Burbank-based Trio-Tech also estimated it lost $350,000 to $400,000 for the fiscal year ended June 30, down from earnings of $2.8 million the preceding year. It said sales totaled $16 million, down 27%.

Trio-Tech President Charles Wilson attributed the downturn to the continuing slump in the semiconductor industry, the costs of starting new testing facilities and the costs from trying to buy MQS. Trio-Tech makes semiconductor testing equipment and also runs testing facilities.

MQS, a unit of Stamford-based GEO International, does non-destructive testing on metals and other materials for several major corporations. Trio-Tech was supposed to pay $14 million in cash for the company.

Trio-Tech was to raise the money by selling convertible debentures, or bonds that can be converted into stock. The recent decline in the company’s stock, however, made the securities less attractive to prospective investors, Wilson said.

Trading over-the-counter, Trio-Tech’s stock recently has been below $4. Its shares traded as high as $9.50 last summer, and $17.50 in the summer of 1984.

Trio-Tech said its fourth-quarter revenue was about $4.2 million, unchanged from last year, but that the costs of the attempted acquisition will give it a quarterly loss. The company said that on an operating basis it roughly broke even.