Ceradyne, Inc. Completes Acquisition of SemEquip, Inc.
August 12 2008 - 7:30AM
Business Wire
Ceradyne, Inc. (Nasdaq: CRDN) announced today the completion of the
acquisition of SemEquip, Inc., located in North Billerica,
Massachusetts. The purchase price consists of $25 million in cash
paid at closing, plus contingent consideration not to exceed $100
million over the next 15 years based upon SemEquip revenues
achieved during that period. Ceradyne used a portion of its
existing cash for the payment made at closing. A portion of the
consideration paid at closing and the contingent consideration to
be paid over 15 years relates to a pre-closing commitment by
SemEquip to pay incentive compensation to several of its employees
and advisors. Although this incentive compensation will not
increase the total consideration Ceradyne will pay for the
acquisition, it will require Ceradyne to record a pre-tax
accounting charge estimated to be in the range of $9.0 million to
$11.0 million in the third quarter of 2008. SemEquip, Inc. is a
leader in the development of cluster ion implantation sub-systems
and advanced ion source materials for the manufacture of logic and
memory chips. SemEquip has significant intellectual property
assets, including a patent portfolio of over 100 granted and
pending patents related to the use of cluster chemicals in
semiconductor ion implantation. Several of these patents have been
described as �seminal� for what may be a disruptive semiconductor
technology. SemEquip�s technologies enable the utilization of
cluster beam ion implantation for manufacturing the most advanced
integrated circuits at lower cost and increased throughput. Michael
Kraft, Ceradyne�s Vice President of Nuclear and Semiconductor
Business Units, commented: �Adding the SemEquip technology in both
ion implant source system hardware and chemicals allows us to
expand our value stream participation into ion beam implantation
process control, chip level chemical doping, and device design, all
of which have a direct impact on semiconductor chip performance.
�There has been a positive response to our announcement of this
acquisition in July and we are presently working with the ion
implant OEMs as well as the chip manufacturing �Fabs� to spread
this technology over a wider range of semiconductor chip
applications. �Key SemEquip personnel will remain after the close.�
David Reed, Ceradyne�s President North American Operations, added:
�The SemEquip acquisition follows the vertical integration model we
have successfully used in the past which includes the manufacture
of final products utilizing Ceradyne-produced raw materials. The
boron isotope 11B (Enriched Boron) used to manufacture the SemEquip
B18H22 ClusterBoron� molecule will be manufactured at Ceradyne
Boron Products in Quapaw, Oklahoma. SemEquip�s cluster ion beam
implantation systems and product line of cluster molecule chemicals
achieve next-generation performance in semiconductor ion
implantation.� Reed further stated that Ceradyne intends to
manufacture the B18H22 ClusterBoron� and other �cluster� molecules
at Ceradyne Boron Products. Conference Call Management will conduct
a conference call to discuss the Company�s acquisition of SemEquip.
Any investor or interested individual can listen to the
teleconference, which is scheduled to begin at 1:30 p.m. PDT (4:30
p.m. EDT) on Wednesday, August 13, 2008. To participate in the
teleconference, please call toll-free 877-717-3046 (or 706-634-6364
for international callers) approximately 10 minutes prior to the
above start time and provide Conference ID 60100340. You may also
listen to the teleconference live via the Internet at
www.ceradyne.com or www.earnings.com. For those unable to attend,
these web sites will host an archive of the call. A telephone
playback will be available for 48-hours beginning at 4:30 p.m. PDT
on August 13. The playback can be accessed by calling 800-642-1687
(or 706-645-9291 for international callers) and providing
Conference ID 60100340. Ceradyne develops, manufactures, and
markets advanced technical ceramic products and components for
defense, industrial, automotive/diesel, and commercial
applications. Additional information about the Company can be found
at www.ceradyne.com. Except for the historical information
contained herein, this press release contains forward-looking
statements regarding future events and the future performance of
Ceradyne that involve risks and uncertainties that could cause
actual results to differ materially from those projected. Words
such as �anticipates,� �believes,� �plans,� �expects,� �intends,�
�future,� and similar expressions are intended to identify
forward-looking statements. These risks and uncertainties are
described in the Company�s Annual Report on Form 10-K for the
fiscal year ended dated December 31, 2007 and its Quarterly Reports
on Form 10-Q as filed with the U.S. Securities and Exchange
Commission.
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