Highly Complementary and Diversified Portfolio
– the Most Comprehensive in the Industry
Poised to Take Advantage of Industry Technology
Roadmap Through World Class Technological Capabilities
Results in Financial Strength and Flexibility
with Pro Forma Sales of Approximately $3 Billion and Adjusted
EBITDA of Approximately $1 Billion for Calendar Year 2018
Expected to Generate More Than $75 Million of
Annual Cost Synergies within 12 Months Post Close
Entegris and Versum Materials Separately
Announce Preliminary Earnings Results; Companies to Host Conference
Call Today at 8:00 a.m. ET (6:00 a.m. MT)
Entegris, Inc. (NASDAQ:ENTG), a leader in specialty chemicals
and advanced materials solutions for the microelectronics industry,
and Versum Materials, Inc. (NYSE:VSM), a leading specialty
materials supplier to the semiconductor industry, today announced
that they have agreed to combine in a merger of equals. The
combined company will be a premier specialty materials company for
the semiconductor and other high-tech industries.
Under the terms of the agreement, which was unanimously approved
by the Boards of Directors of both companies, Versum Materials
stockholders will receive 1.120 shares of Entegris for each
existing Versum Materials share. Upon completion of the merger,
Entegris stockholders will own 52.5 percent and Versum Materials
stockholders will own 47.5 percent of the combined company1. The
combined company will have a pro forma enterprise value of
approximately $9 billion, based on the closing prices of Entegris
and Versum Materials on January 25, 2019, and approximately $3
billion in revenue and approximately $1 billion in Adjusted EBITDA
on a pro forma basis for calendar year 20182.
The combined company will retain the Entegris name and will be
headquartered in Billerica, Massachusetts, and will maintain a
strong operational presence in Tempe, Arizona.
Upon closing of the transaction, Entegris CEO Bertrand Loy will
serve as Chief Executive Officer, Entegris CFO Greg Graves will
serve as Chief Financial Officer, and Versum Materials General
Counsel Michael Valente will serve as General Counsel of the
combined company, supported by a highly experienced and proven
leadership team that reflects the strengths and capabilities of
both companies.
The combined company’s Board of Directors will have nine
members, consisting of four directors from the existing Versum
Materials board, including Seifi Ghasemi, Chairman of the Versum
Materials Board, who will serve as Chairman of the Board of the
combined company, and five directors from the existing Entegris
Board, including Bertrand Loy.
Entegris President and Chief Executive Officer, Bertrand Loy
said, “We are excited to combine with Versum Materials to create a
premier specialty materials company for the semiconductor and other
high-tech industries. The combined company will be ideally
positioned to more effectively help our customers achieve higher
yields and new levels of performance and reliability, and together,
we will be well positioned to take advantage of long-term secular
semiconductor growth, and to tackle new industry process
challenges. I have great respect for the Versum Materials team and
look forward to joining forces as we embark on this next chapter
and create new value for our stockholders, employees and
customers.”
Versum Materials President and Chief Executive Officer,
Guillermo Novo said, “We could not ask for a better partner in
Entegris. This merger will create greater benefits and growth
opportunities than either company could have achieved on its own.
It dramatically accelerates our goal of portfolio diversification –
creating an end-to-end materials solutions provider across the
entire semiconductor manufacturing process. With enhanced global
scale and world class technical expertise, we’ll be poised to drive
further innovation and support investments across our technology,
infrastructure, and additional capabilities – enabling us both to
better serve our customers and provide expanded opportunities for
our employees.”
Compelling Strategic and Financial Benefits of the
Merger
- Enhanced product breadth and
depth: Entegris and Versum Materials have highly complementary
portfolios that combined will bring customers enhanced technical
capabilities. This merger will create the world’s first
comprehensive and effective end-to-end materials solutions provider
across the entire semiconductor manufacturing process. The combined
company is expected to have a full suite of diversified product
offerings including Advanced Materials, Specialty Gases,
Microcontamination Control, Advanced Materials Handling, and
Delivery Systems and Services.
- World class technology: The
combined company’s world class technology and R&D capabilities
will better enable it to:
- Address customers’ evolving needs for
new materials as device architectures become more complex;
- Capitalize on the increasing demand for
purity and help drive improved yield; and
- Accelerate the development and time to
market of new technologies that align with the industry technology
roadmap.
- Global scale and operational
excellence: A much broader, global scale will enable the
combined company to reach additional customer touch points, and
have increased relevance in key geographies. By combining its
extensive global manufacturing network, the company will be able to
improve delivery times and drive new levels of operational
efficiencies and excellence.
- Increased financial strength and
flexibility: The combined company will have approximately $3
billion in revenue and approximately $1 billion in Adjusted EBITDA
on a pro forma basis for calendar year 20183. It will be well
capitalized with a strong balance sheet and a pro forma net
leverage ratio of 1.1x4. In addition, it will have flexibility to
invest, make acquisitions, and return capital to stockholders,
while enjoying greater earnings stability and margin growth
potential.
- Significant stockholder value
creation: The combination is expected to generate more than $75
million of annual cost synergies in manufacturing, logistics,
procurement and SG&A rationalization within 12 months post
close. In addition, the combined company is expected to realize
significant revenue growth synergies from cross-selling
opportunities, with further potential upside from capex and revenue
synergies.
Timing and Approvals
The transaction is expected to close in the second half of 2019,
subject to the satisfaction of customary closing conditions,
including receipt of U.S. and international regulatory approvals,
and approval by the stockholders of each company.
Advisors
Morgan Stanley & Co. LLC is serving as exclusive financial
advisor to Entegris and Wachtell, Lipton, Rosen & Katz is
serving as legal counsel. Lazard is serving as exclusive financial
advisor to Versum Materials and Simpson Thacher & Bartlett LLP
is serving as legal counsel.
Joint Conference Call and Webcast Information
A joint conference call and webcast will be held today at 8:00
a.m. ET (6:00 a.m. MT) to discuss this announcement. The conference
call can be accessed by dialing (866) 610-1072 within the U.S. and
(973) 935-2840 for all other locations. The live webcast, along
with the related presentation, will be available to interested
parties via Entegris’ IR website at
http://investor.entegris.com/investor-relations and Versum
Materials’ IR website at http://investors.versummaterials.com, as
well as through the joint transaction website at
www.entegris-versummaterials.com. A replay of the webcast will be
available following the call. To access the replay, please dial
(800) 585-8367 within the U.S. or (404) 537-3406 for all other
locations. The Conference ID for the conference call and replay is
4264678.
Entegris Fourth Quarter and Full Year 2018 Preliminary
Earnings Results and Versum Materials First Quarter 2019
Preliminary Earnings Results
In separate releases issued today, Entegris announced its
preliminary financial results for the fourth quarter and full year
of 2018 and Versum Materials announced its preliminary financial
results for the first quarter of 2019.
For additional information on the transaction, please visit the
joint transaction website at www.entegris-versummaterials.com.
About Entegris
Entegris is a leader in specialty chemicals and advanced
materials solutions for the microelectronics industry and other
high-tech industries. Entegris is ISO 9001 certified and has
manufacturing, customer service and/or research facilities in the
United States, China, France, Germany, Israel, Japan, Malaysia,
Singapore, South Korea and Taiwan. Additional information can be
found at www.entegris.com.
About Versum Materials
Versum Materials, Inc. (NYSE:VSM) is a leading global specialty
materials company providing high-purity chemicals and gases,
delivery systems, services and materials expertise to meet the
evolving needs of the global semiconductor and display industries.
Derived from the Latin word for "toward," the name "Versum"
communicates the company's deep commitment to helping customers
move toward the future by collaborating, innovating and creating
cutting-edge solutions.
A global leader in technology, quality, safety and reliability,
Versum Materials is one of the world's leading suppliers of
next-generation CMP slurries, ultra-thin dielectric and metal film
precursors, formulated cleans and etching products, and delivery
equipment that has revolutionized the semiconductor industry.
Versum Materials reported fiscal year 2018 annual sales of about
U.S. $1.4 billion, has approximately 2,300 employees and operates
14 major facilities in Asia and the North America. It is
headquartered in Tempe, Arizona. Versum Materials had operated for
more than three decades as a division of Air Products and
Chemicals, Inc. (NYSE:APD).
For additional information, please visit
http://www.versummaterials.com.
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. Where a forward-looking statement expresses or
implies an expectation or belief as to future events or results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. 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 are
only predictions and involve known and unknown risks and
uncertainties, many of which are beyond Entegris’ and Versum
Materials’ control. Statements in this communication regarding
Entegris, Versum Materials and the combined company that are
forward-looking, including projections as to the anticipated
benefits of the proposed transaction, the impact of the proposed
transaction on Entegris’ and Versum Materials’ business and future
financial and operating results, the amount and timing of synergies
from the proposed transaction, and the closing date for the
proposed transaction, are based on management’s estimates,
assumptions and projections, and are subject to significant
uncertainties and other factors, many of which are beyond Entegris’
and Versum Materials’ control. 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 Versum
Materials’ products and solutions; (ii) the ability to meet rapid
demand shifts; (iii) the ability to continue technological
innovation and introduce new products to meet customers’ rapidly
changing requirements; (iv) the concentrated customer base; (v) the
ability to identify, effect and integrate acquisitions, joint
ventures or other transactions; (vi) the ability to protect and
enforce intellectual property rights; (vii) operational, political
and legal risks of Entegris’ and Versum Materials’ international
operations; (viii) Entegris’ dependence on sole source and limited
source suppliers; (ix) the increasing complexity of certain
manufacturing processes; (x) raw material shortages and price
increases; (xi) changes in government regulations of the countries
in which Entegris and Versum Materials operate; (xii) the
fluctuation of currency exchange rates; (xiii) fluctuations in the
market price of Entegris’ stock; (xiv) the level of, and
obligations associated with, Entegris’ and Versum Materials’
indebtedness; and (xv) other risk factors and additional
information. In addition, material 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 Entegris’ and Versum Materials’ ability to obtain
the approval of the proposed transaction by their shareholders
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 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 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. For a
more detailed discussion of such risks and other factors, see
Entegris’ and Versum Materials’ 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, 2017, filed on February 15, 2018, and Versum
Materials’ Annual Report on Form 10-K for the fiscal year ended
September 30, 2018, filed on November 21, 2018 and in other
periodic filings, available on the SEC website or www.entegris.com
or www.versummaterials.com. Entegris and Versum Materials’ 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.
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 and Versum
Materials. 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 that will include a
joint proxy statement of Entegris and Versum Materials that also
constitutes a prospectus of Entegris. Each of Entegris and Versum
Materials also plan to file other relevant documents with the SEC
regarding the proposed transaction. No offering of securities shall
be made, except by means of a prospectus meeting the requirements
of Section 10 of the U.S. Securities Act of 1933, as amended. Any
definitive joint proxy statement/prospectus (if and when available)
will be mailed to stockholders of Entegris and Versum Materials.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS
THAT MAY BE FILED WITH THE SEC 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 Versum Materials, 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://www.entegris.com or by contacting Entegris’
Investor Relations Department by email at irelations@entegris.com
or by phone at 978-436-6500. Copies of the documents filed with the
SEC by Versum Materials will be available free of charge on Versum
Materials’ website at investors.versummaterials.com or by phone at
484-275-5907.
Participants in the Solicitation
Entegris, Versum Materials 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 2018
annual meeting of shareholders, which was filed with the SEC on
March 28, 2018, and Entegris’ Annual Report on Form 10-K for the
fiscal year ended December 31, 2017, which was filed with the SEC
on February 15, 2018. Information about the directors and executive
officers of Versum Materials is set forth in its proxy statement
for its 2019 annual meeting of shareholders, which was filed with
the SEC on December 20, 2018, and Versum Materials’ Annual Report
on Form 10-K for the fiscal year ended September 30, 2018, which
was filed with the SEC on November 21, 2018. 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 joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the proposed transaction when such materials
become available. Investors should read the joint proxy
statement/prospectus carefully when it becomes available before
making any voting or investment decisions. You may obtain free
copies of these documents from Entegris or Versum Materials using
the sources indicated above.
1 Ownership based on fully diluted shares outstanding including
exercisable options only.
2 Revenue and Adjusted EBITDA LTM as of December 31, 2018;
Adjusted EBITDA inclusive of expected synergies of $75 million.
3 Revenue and Adjusted EBITDA LTM as of December 31, 2018;
Adjusted EBITDA inclusive of expected synergies of $75 million.
4 Net debt as of December 31, 2018 and EBITDA LTM as of December
31, 2018; EBITDA inclusive of expected synergies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190128005253/en/
Entegris ContactsBill SeymourVP of Investor
Relations952-556-1844bill.seymour@entegris.comOrMichael Freitag /
Kelly SullivanJoele Frank, Wilkinson Brimmer
Katcher212-355-4449Versum Materials ContactsSoohwan Kim,
CFAHead of Investor
Relations602-282-0957Soohwan.Kim@versummaterials.comTiffany
ElleGlobal
Communications480-282-6475Tiffany.Elle@versummaterials.comOrMeghan
Gavigan / Emily Claffey / Julie RudnickSard Verbinnen &
Co212-687-8080
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