Data I/O completes $23 million acquisition of V-Tek and A&G
Key Facts
Data I/O announced on October 21 that it had completed the acquisition of V-Tek and A&G Programming, with an announced purchase price of about $23 million. The company said in its closing announcement that final consideration comprised $20 million in cash and $3 million in its common stock. Completion follows the announcement of an agreement providing for payment through a combination of cash and stock, according to the company's filing with the U.S. Securities and Exchange Commission. The consideration announced in the agreement included the issuance of about 1.12 million Data I/O common shares under the purchase terms. Management linked the acquisition to expanding the company's revenue sources beyond automotive electronics and accelerating its entry into programming services at customer sites.
A&G Programming provides device programming services and is based in San Jose, California, according to Data I/O's acquisition statement. In the initial deal announcement, management described entry into programming-as-a-service at customer sites as one of the objectives of acquiring the new business. It said the deal "accelerates our entry into programming-as-a-service at customer sites," referring to the service delivery model it is targeting. In the same announcement, the company said it expected the acquisition, once completed, to nearly double its annual revenue and have a positive impact on earnings and cash flow. Management framed that impact as a deal-related forecast, saying it would result in "nearly doubling Data I/O's annual revenue, as well as enhancing earnings and cash flow."
To finance the acquisition, Data I/O announced a private placement agreement for securities worth about $13.25 million, according to the company's financing statement. The proposed placement includes convertible subordinated notes and common stock, combining borrowing and equity issuance in the announced financing structure. According to the company's SEC filing, the proposed terms provide for the notes to have a maturity of 5 years. The notes carry interest of 5% in the first year, with the rate rising by one percentage point annually in subsequent years. The deal financing thus includes an obligation to pay stepped-up interest on the notes, alongside the common stock component in the private placement agreement announced by the company.
The deal follows a quarterly recovery in Data I/O's revenue in the second quarter of 2026, according to results the company announced on August 12. Revenue for that quarter was $5.2 million, up 59% from the first quarter of the same year. On a year-on-year basis, revenue in the corresponding quarter of 2025 was about $5.9 million, according to the same earnings statement. Second-quarter revenue thus remained below the year-earlier level despite the increase from the first quarter. That places the quarterly performance preceding the acquisition alongside management's forecast for expanding annual revenue through the deal, which it also linked to diversifying revenue beyond automotive electronics.
On liquidity, Data I/O had cash of $10.8 million as of June 30, 2026, according to its second-quarter earnings statement. That compares with cash of $5.7 million as of March 31 of the same year, reflecting an increase in the balance between the two period ends. The reported cash balance at the end of June preceded the announcement of the acquisition's completion in October and the cash consideration specified in the closing statement. In the stock market, the company's shares, traded under the symbol DAIO, closed at $2.58 in the October 20 session, according to EL7 data. That was the closing price in the session before the company issued its October 21 announcement on the completion of the previously announced acquisition.
Following completion of the acquisition, V-Tek will operate as a Data I/O subsidiary under the arrangement the company outlined in its October 21 closing announcement. As part of the financing process, the company committed to filing a registration statement on Form S-1 with the SEC within 30 days of the placement's closing. That commitment appeared in the financing disclosure for the convertible notes and common stock, with the filing deadline tied to the closing date of that placement. Data I/O also intends to hold a special shareholder meeting within 120 days of the placement's closing, according to the same disclosure. The registration process and shareholder meeting are among the next steps for the announced financing, while V-Tek begins operating under Data I/O's ownership as a subsidiary following the acquisition.