Key Highlights

  • Data I/O completed the Acquisition of V-TEK and A&J Programming on 21 October 2026 for about $23 million, comprising $20 million in cash and about $3 million in stock.
  • The company proposed a private Placement of about $13.25 million, including convertible subordinated debentures convertible at $2.68 per share.
  • Second-quarter 2026 Revenue was $5.2 million, down about 13 per cent year on year but up 59 per cent from the first quarter.

The V-TEK acquisition

Data I/O Corporation (NASDAQ:DAIO), which makes programming and security deployment systems for electronics manufacturers, announced on 19 October 2026 that it had agreed to acquire V-TEK, Inc. and A&J Programming, Inc. It completed the purchase on 21 October. V-TEK, based in Mankato, Minnesota, makes semiconductor handling automation for test and packaging, and A&J provides device programming services from San Jose, California.

Total consideration was about $23 million: $20 million in cash and about $3 million in Data I/O common stock, or roughly 1.12 million shares. The releases disclosed no revenue or EBITDA for the targets, and no numerical guidance.

Strategic rationale

Chief Executive William Wentworth said the deal is "expected to be accretive to our existing operations", and the company's headline says it is anticipated to double revenue. Management cited Diversification away from cyclical capital-equipment markets and from automotive, and expansion into data centre, AI, photonics, industrial automation, medical and defence markets.

It also pointed to faster growth in Programming-as-a-Service, sales synergies, Operating Leverage and lower-cost domestic manufacturing. These are management expectations; without target financials, they cannot be tested. The August release had also flagged an intent to acquire IAR's embedded software security Assets and cited the EU Cyber Resilience Act as a Demand driver for security provisioning.

The financing

On 19 October the company proposed a private placement of about $13.25 million. About $7.25 million of convertible subordinated debentures convert automatically into common stock at $2.68 per share, and about $4.0 million convert into non-voting preferred stock at $1,000 per preferred share, itself convertible at $2.68. The debentures carry 5 per cent interest in the first year, rising by one percentage point annually, with a five-year term.

The remaining roughly $2 million appears to be common shares. The release states that a special Shareholder meeting is expected within 120 days of closing to approve issuing more than 19.9 per cent of shares outstanding, and that a registration statement is to be filed within 30 days.

At the stated conversion price, the debentures and preferred stock, together with the acquisition shares, could add around five million new shares before any common shares sold.

The prior quarter

The latest reported quarter, ended 30 June 2026 and published on 12 August, showed revenue of $5.2 million, down about 13 per cent year on year but up 59 per cent from the first quarter. Gross Margin was 57.0 per cent, the net loss was $1.63 million, and cash was $10.8 million. Backlog was $2.1 million. Pro forma results including V-TEK have not been published.

Other disclosures in the August release included bookings of $4.9 million, a $9 million direct Investment closed in May 2026, and a June 2026 convertible Debt that was later converted into preferred equity, eliminating $6.2 million of debt. Platform sales were 45 per cent of revenue, against 19 per cent in the first quarter, which shows how much quarterly mix can swing.

What to watch

Items to follow include third-quarter results, expected around 6 November 2026 on an estimated basis, V-TEK's contribution, the shareholder vote on share issuance, integration costs and the use of financing proceeds, which the release did not specify.