Adds Leading CMP Products and Technology to
Entegris’ World-Class Solutions Set, Creating a Comprehensive
Electronic Materials Platform
Highly Complementary Combined Portfolio Expands
Served Markets and Content per Wafer Opportunity
Opportunity to Unlock Growth and Profitability
through Enhanced Innovation, Scale, Execution and Revenue
Synergies
Expected to be Significantly Accretive to
Non-GAAP EPS in Year 1; Generates $75 Million in Run-Rate Cost
Synergies and $40 Million of CapEx Synergies within 12-18 Months
from Closing
Entegris and CMC Materials to Host Conference
Call Today at 8:00 a.m. EST
Entegris, Inc. (NASDAQ: ENTG) and CMC Materials, Inc. (NASDAQ:
CCMP) today announced a definitive merger agreement under which
Entegris will acquire CMC Materials in a cash and stock transaction
with an enterprise value of approximately $6.5 billion.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20211214006380/en/
Under the terms of the agreement, CMC Materials shareholders
will receive $133.00 in cash and 0.4506 shares of Entegris common
stock for each share of CMC Materials common stock they own. The
total per share consideration represents a 35% premium over CMC
Materials’ closing price on December 14, 2021, and a 38% premium to
the 10-day volume weighted average share price. Upon completion of
the transaction, Entegris shareholders will own approximately 91%
of the combined company and CMC Materials shareholders will own
approximately 9%.
CMC Materials is a leading supplier of advanced materials
primarily for the semiconductor industry. The addition of CMC
Materials’ leading CMP portfolio will broaden Entegris’ solutions
set, creating a comprehensive electronic materials offering. The
complementary nature of the companies’ technology platforms will
enable Entegris to bring to market a broader array of innovative
and high-value solutions, at a faster pace. These enhanced
materials and process solutions for the most advanced manufacturing
environments will help customers improve productivity, performance
and total cost of ownership.
Bertrand Loy, President and Chief Executive Officer of Entegris,
said, “Acquiring CMC Materials will further differentiate our
unit-driven platform and advance our ability to provide a broad
range of process solutions for our customers, at a faster
time-to-solution. The highly complementary combined portfolio
creates the industry’s most comprehensive and innovative end-to-end
electronic materials offering, as well as significantly expands our
growing served market and content per wafer opportunity. In
addition, we believe the acquisition will allow us to unlock
significant growth through enhanced innovation, scale and
execution. We also expect to utilize our significant cash flows to
rapidly reduce leverage. We are confident that as a combined
organization, we will be poised to deliver significant value for
our customers, colleagues and shareholders.”
“We are excited to be joining forces with Entegris. The
combination provides immediate and substantial value to CMC
Materials shareholders and provides meaningful participation in the
long-term growth opportunities created by the transaction,” said
David Li, President and Chief Executive Officer of CMC Materials.
“CMC Materials and Entegris share highly complementary businesses
and capabilities grounded in world-class innovation and customer
collaboration. As part of Entegris’ leading platform, we will
maintain our strong focus on technology innovation and customer
partnerships and provide expanded opportunities for our employees.
We look forward to what the combined company can accomplish.”
Compelling Strategic and Financial Benefits
- Highly Complementary Combined CMP Portfolio Significantly
Expands Served Markets and Provides Customers with Comprehensive
and Innovative Offering: Entegris will offer a compelling value
proposition to customers in the industry through a broader
portfolio of solutions and enhanced operating capabilities, in the
fab environment and across the supply chain. The addition of CMC
Materials’ leading CMP slurries and pads will provide Entegris with
a full end-to-end suite of CMP solutions, also including liquid
filters (POU and bulk), post-CMP cleaning chemistries and brushes,
CMP pad conditioners, particle monitors and chemical packaging
products, enabling shorter development times for these solutions.
The expanded portfolio will increase Entegris’ growing served
markets in semiconductor applications to approximately $12 billion
as well as its content per wafer opportunity, and it will increase
Entegris’ unit-driven revenue from 70% to approximately 80%.
- Accelerates Innovation Capabilities through Greater R&D
Scale and Expanded IP Portfolio: As customers transition to
more complex device architectures, there will be increased demand
for higher-quality, higher-performing technologies, delivered to
market faster. Entegris will have greater capability to innovate
and meet evolving customer demand through the deployment of proven,
industry-leading commercial, operational and R&D capabilities.
In addition, Entegris’ deep expertise in purification,
contamination control and advanced materials will enhance CMC
Materials’ long-term technology advancement.
- Meaningful Revenue Growth and EPS Accretion: The
transaction is expected to be significantly accretive to non-GAAP
EPS within the first year post-closing. Entegris expects to realize
$75 million in run-rate cost synergies and $40 million in CapEx
synergies within 12 to 18 months from the closing of the
transaction. In addition, Entegris expects to drive meaningful
revenue synergies through co-optimized solutions, cross-selling
opportunities and stronger customer response and
collaboration.
- Strong Cash Flow Generation Enables Investments in Growth
and Disciplined Deleveraging: Entegris is targeting pro forma
adjusted gross leverage of approximately 4.0x at closing. With
approximately $1.1 billion in adjusted EBITDA on a pro forma LTM
basis including synergies, Entegris will be well positioned to
rapidly reduce its leverage to less than 3.0x, while investing in
growth opportunities and continuing its dividend policy for the
benefit of Entegris and CMC Materials shareholders. Entegris plans
to suspend share repurchases until further notice.
Additional Terms, Financing and Approvals
The transaction is to be financed with a combination of equity
issued to CMC Materials, new debt and cash on hand. Entegris has
obtained fully committed debt financing from Morgan Stanley Senior
Funding, Inc.
The transaction is not subject to a financing condition.
The transaction is expected to close in the second half of 2022,
subject to the satisfaction of customary closing conditions,
including regulatory approvals and approval by CMC Materials
shareholders.
Advisors
Morgan Stanley & Co. LLC is serving as exclusive financial
advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving
as legal counsel to Entegris. Goldman Sachs & Co. LLC is
serving as financial advisor to CMC Materials, and Wachtell,
Lipton, Rosen & Katz is serving as legal counsel.
Conference Call and Webcast
Entegris and CMC Materials will host a conference call and
online webcast today, December 15, 2021, at 8:00 a.m. Eastern Time
to discuss the transaction. The conference call can be assessed by
dialing toll-free (877) 270-2148 or (412) 902-6510 for
international callers requesting the Entegris and CMC Materials
call. A live webcast of the conference call will be available on
the investor relations section of each company’s website at
Entegris investor.entegris.com and CMC Materials
cmcmaterials.com/investors as well as the transaction website at
www.EntegrisCMCTransaction.com.
A replay of the call will be available from December 15, 2021 to
December 29, 2021 by dialing (877) 344-7529 (U.S.), (855) 669-9658
(Canada) or (412) 317-0088 (International) and using the passcode
9724655. A replay of the webcast can be accessed via each company’s
IR website.
Presentation and Infographic
Associated presentation materials and an infographic regarding
the transaction will be available on the investor relations site of
each company’s website at investor.entegris.com and
cmcmaterials.com/investors as well as a transaction website at
www.EntegrisCMCTransaction.com.
About Entegris
Entegris is a world-class supplier of advanced materials and
process solutions for the semiconductor and other high-technology
industries. Entegris has approximately 6,600 employees throughout
its global operations and is ISO 9001 certified. It has
manufacturing, customer service, and/or research facilities in the
United States, Canada, China, France, Germany, Israel, Japan,
Malaysia, Singapore, South Korea, and Taiwan. Additional
information may be found at www.entegris.com.
About CMC Materials
CMC Materials, Inc., headquartered in Aurora, Illinois, is a
leading global supplier of consumable materials primarily to
semiconductor manufacturers. The company’s products play an
important role in the production of advanced semiconductor devices,
helping to enable the manufacture of smaller, faster and more
complex devices by its customers. CMC Materials is also a leading
provider of performance materials to pipeline operators. The
company's mission is to create value by delivering high-performing
and innovative solutions that solve its customers’ challenges. The
company has approximately 2,200 employees globally.
Additional Information about the Merger and Where to Find
It
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This communication relates to
a proposed business combination between Entegris, Inc. (“Entegris”)
and CMC Materials, Inc. (“CMC”). In connection with the proposed
transaction, Entegris intends to file with the Securities and
Exchange Commission (the “SEC”) a registration statement on Form
S-4 (the “Registration Statement”) that will include a proxy
statement of CMC and that also constitutes a prospectus of
Entegris. Each of Entegris and CMC may also file other relevant
documents with the SEC regarding the proposed transaction. This
document is not a substitute for the proxy statement/prospectus or
Registration Statement or any other document that Entegris or CMC
may file with the SEC. Any definitive proxy statement/prospectus
(if and when available) will be mailed to stockholders of CMC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT, PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY
BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Investors and security holders will
be able to obtain free copies of these documents (if and when
available) and other documents containing important information
about Entegris and CMC, once such documents are filed with the SEC
through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Entegris will be
available free of charge on Entegris’ website at
http://Entegris.com or by contacting Entegris’ Investor Relations
Department by email at irelations@Entegris.com or by phone at +1
978-436-6500. Copies of the documents filed with the SEC by CMC
will be available free of charge on CMC’s website at
www.CMCmaterials.com/investors or by contacting CMC’s Investor
Relations Department by email at investors@CMCmaterials.com by
phone at +1 630-499-2600.
Participants in the Solicitation
Entegris, CMC and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of Entegris
is set forth in Entegris’ proxy statement for its 2021 annual
meeting of stockholders, which was filed with the SEC on March 17,
2021, and Entegris’ Annual Report on Form 10-K for the fiscal year
ended December 31, 2020, which was filed with the SEC on February
5, 2021. Information about the directors and executive officers of
CMC is set forth in its proxy statement for its 2021 annual meeting
of stockholders, which was filed with the SEC on January 19, 2021,
and CMC’s Annual Report on Form 10-K for the fiscal year ended
September 30, 2021, which was filed with the SEC on November 12,
2021. Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the definitive proxy statement/prospectus included in the
Registration Statement, and other relevant materials to be filed
with the SEC regarding the proposed transaction when such materials
become available. Investors should read the Registration Statement
and the proxy statement/prospectus carefully when these become
available before making any voting or investment decisions. You may
obtain free copies of these documents from Entegris or CMC using
the sources indicated above.
Cautionary Note on Forward Looking Statements
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties and are made pursuant
to the safe harbor provisions of Section 27A of the Securities Act
of 1993, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended. The words “believe” “continue,” “could,”
“expect,” “anticipate,” “intends,” “estimate,” “forecast,”
“project,” “should,” “may,” “will,” “would” or the negative thereof
and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements,
including statements relating to anticipated results of operations,
business strategies of Entegris, CMC and the combined company,
anticipated benefits of the proposed transaction, the anticipated
impact of the proposed transaction on Entegris’ and CMC’s business
and future financial and operating results, the expected amount and
timing of synergies from the proposed transaction, the anticipated
closing date for the proposed transaction and other aspects of
CMC’s and Entegris’ operations or operating results, are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond Entegris’ and CMC’s control, and could
cause actual results to differ materially from those indicated in
such forward-looking statements. These factors and risks include,
but are not limited to, (i) weakening of global and/or regional
economic conditions, generally or specifically in the semiconductor
industry, which could decrease the demand for Entegris’ and CMC’s
products and solutions; (ii) the parties’ ability to meet rapid
demand shifts; (iii) the parties’ ability to continue technological
innovation and introduce new products to meet customers’ rapidly
changing requirements; (iv) Entegris’ and CMC’s ability to protect
and enforce intellectual property rights; (v) operational,
political and legal risks of Entegris’ and CMC’s international
operations; (vi) the increasing complexity of certain manufacturing
processes; (vii) raw material shortages, supply and labor
constraints and price increases; (viii) changes in government
regulations of the countries in which Entegris and CMC operate;
(ix) the fluctuation of currency exchange rates; (x) fluctuations
in the market price of Entegris’ stock; (xi) the level of, and
obligations associated with, Entegris’ and CMC’s indebtedness;
(xii) the impact of public health crises, such as pandemics
(including coronavirus (COVID-19)) and epidemics and any related
company or government policies and actions to protect the health
and safety of individuals or government policies or actions to
maintain the functioning of national or global economies and
markets; and (xiii) other risk factors and additional information.
In addition, risks that could cause actual results to differ from
forward-looking statements include: the inherent uncertainty
associated with financial or other projections; the prompt and
effective integration of Entegris’ businesses and the ability to
achieve the anticipated synergies and value-creation contemplated
by the proposed transaction; the risk associated with CMC’s ability
to obtain the approval of the proposed transaction by its
stockholders required to consummate the proposed transaction and
the timing of the closing of the proposed transaction, including
the risk that the conditions to the transaction are not satisfied
on a timely basis or at all and the failure of the transaction to
close for any other reason; the risk that a regulatory consent or
authorization that may be required for the proposed transaction is
not obtained or is obtained subject to conditions that are not
anticipated; unanticipated difficulties or expenditures relating to
the transaction, the outcome of any legal proceedings related to
the merger, the response of business partners and retention as a
result of the announcement and pendency of the transaction; and the
diversion of management time on transaction-related issues. These
risks, as well as other risks related to the proposed transaction,
will be included in the registration statement on Form S-4 and
proxy statement/prospectus that will be filed with the SEC in
connection with the proposed transaction. While the list of factors
presented here is, and the list of factors to be presented in the
registration statement on Form S-4 and proxy statement/prospectus
are, considered representative, no such list should be considered
to be a complete statement of all potential risks and
uncertainties. For a more detailed discussion of such risks and
other factors, see Entegris’ and CMC’s filings with the Securities
and Exchange Commission, including under the heading “Risks
Factors” in Item 1A of Entegris’ Annual Report on Form 10-K for the
fiscal year ended December 31, 2020, which was filed with the SEC
on February 5, 2021, and CMC’s Annual Report on Form 10-K for the
fiscal year ended September 30, 2021, which was filed with the SEC
on November 12, 2021 and in other periodic filings, available on
the SEC website or www.Entegris.com or www.cmcmaterials.com.
Entegris and CMC assume no obligation to update any forward-looking
statements or information, which speak as of their respective
dates, to reflect events or circumstances after the date of this
communication, or to reflect the occurrence of unanticipated
events, except as may be required under applicable securities laws.
Investors should not assume that any lack of update to a previously
issued “forward-looking statement” constitutes a reaffirmation of
that statement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211214006380/en/
Entegris, Inc.: Bill Seymour Vice President of Investor
Relations (952) 556-1844 bill.seymour@entegris.com
CMC Materials, Inc.: Colleen Mumford Vice President,
Communications and Marketing (630) 499-2600
Colleen.Mumford@cmcmaterials.com
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