Cabot Microelectronics Corporation Announces Agreement to Acquire the Assets of QED Technologies, Inc.
June 15 2006 - 7:55AM
Business Wire
Cabot Microelectronics Corporation (NASDAQ:CCMP), the world's
leading supplier of chemical mechanical planarization (CMP)
polishing slurries to the semiconductor industry, announced today
that it has entered into agreements to purchase substantially all
of the assets of QED Technologies, Inc. (QED) and certain
associated proprietary technology and intellectual property. QED is
a privately-held company that specializes in unique, patented
polishing and metrology systems for high precision optics. This
acquisition is a further step in the execution of Cabot
Microelectronics' Engineered Surface Finishes (ESF) growth
initiative. Through the ESF initiative, the company seeks to
leverage its expertise in CMP formulation, materials and polishing
techniques for the semiconductor industry to address other
demanding market applications requiring nanoscale control of
surface shape and finish. Established in 1996, QED is best known
for Magneto-Rheological Finishing (MRF(R)), its proprietary surface
figuring and finishing technology. MRF outperforms traditional
finishing technologies and has the unique ability to predictively
improve both figure and surface finish simultaneously. With more
than 100 systems in operation worldwide, MRF is widely acknowledged
as the best-in-class technology for final figuring of the highest
precision optics. As a natural complement to MRF, QED has also
recently commercialized its proprietary metrology technology,
Subaperture Stitching Interferometry (SSI(R)). Interferometers,
which measure the surface of an optic, traditionally are limited by
the size and precision of the reference optic used. SSI is designed
to remove those barriers, giving the user an accurate, complete map
of the optical surface. This map is needed to produce the highest
precision optics to the most exacting tolerances. Upcoming products
are expected to extend SSI to include aspheres and freeform shapes.
In combination with MRF, SSI enables the transition from
time-consuming, costly, labor-intensive processes to repeatable,
efficient automation in producing precision optical surfaces. "We
believe the precision optics industry and QED Technologies provide
excellent vehicles for us to leverage our capabilities and expand
into new markets under our ESF initiative," stated William P.
Noglows, Chairman and CEO of Cabot Microelectronics. "The pervasive
and growing precision optics market is placing increasing value on
high quality surface finishes and high precision form factors. The
industry has clearly articulated, unmet needs involving complex
geometries, unique materials and pristine surface finish
requirements. Supporting end markets and applications such as
semiconductor lithography and inspection, defense and aerospace
imaging, industrial lasers and professional and consumer imaging,
this industry is in transition from traditional, artisan methods to
automated, repeatable and reliable processes. QED provides us with
a platform of unique polishing and metrology technologies and
products, commercial entry into the precision optics market and an
outstanding team of scientists, engineers and associates. We
believe combining QED's business with our expertise in CMP will
form a strong foundation for growth. We expect that the QED
business will leverage CMC's expertise in polishing chemistry to
enhance the development of MRF consumables, and that our global
infrastructure will accelerate QED's entry into new markets." "We
are pleased to be joining a company that shares our passion for
technological innovation and surpassing customer needs," stated Don
Golini, President of QED. "Just as CMP is an enabling technology
for the semiconductor industry, we believe our patented processes
allow precision optics manufacturers to achieve greater performance
and improved efficiency. We believe that combining the
complementary strengths of QED and Cabot Microelectronics will
present new and exciting solutions for the precision optics market,
as well as new opportunities for the growth of our products and
services." The purchase price for the acquired assets is between
$19 and $23.5 million, with the exact amount dependent upon the
performance of the QED business over the two years following the
closing of the transaction, which is expected to occur in July
2006. The purchase price will be paid in cash from Cabot
Microelectronics' available reserves. In conjunction with the
transaction, Cabot Microelectronics will assume approximately $2
million of current liabilities of QED. QED is presently a
profitable business and generated revenue in the last calendar year
of about $12 million. Cabot Microelectronics expects the effect of
the acquisition to be mildly dilutive to its earnings per share
over the next two years due to integration costs and the impact of
amortizing the cost of acquired intangible assets, and accretive
thereafter. The company currently expects to record a pre-tax
charge of approximately $2 million in its fourth fiscal quarter,
ending September 30, 2006, due to the write off of "in-process"
research and development activities, as required by accounting
rules. ABOUT CABOT MICROELECTRONICS CORPORATION Cabot
Microelectronics Corporation, headquartered in Aurora, Illinois, is
the world's leading supplier of CMP slurries used in semiconductor
and data storage manufacturing. The company's products play a
critical role in the production of the most advanced semiconductor
devices, enabling the manufacture of smaller, faster and more
complex devices by its customers. Since becoming an independent
public company in 2000, the company has grown to approximately 650
employees who work at research and development labs, sales and
business offices, manufacturing facilities and customer service
centers in China, France, Germany, Japan, Singapore, South Korea,
Taiwan, the United Kingdom and the United States. In addition to
its core CMP business, the company's vision looks beyond the
semiconductor industry to become the world leader in shaping,
enabling and enhancing the performance of surfaces. For more
information about Cabot Microelectronics Corporation, visit
www.cabotcmp.com or contact Barbara Ven Horst, Director of Investor
Relations at (630) 375-5412. Additional information about the
company's Engineered Surface Finishes initiative can be found at
www.ensurfin.com. ABOUT QED TECHNOLOGIES, INC. QED Technologies,
Inc., based in Rochester, New York and with operations also in
Japan, Europe and Australia, is the pioneer and exclusive provider
of Magneto-Rheological Finishing (MRF(R)) and Subaperture Stitching
Interferometry (SSI(R)) technologies for the precision optics
industry. MRF(R) combines magnetic fluids with sophisticated
computer programs and computer controlled machines to create a
patented process that deterministically improves both shape and
surface accuracy simultaneously. SSI(R) improves the capacity and
accuracy of a standard interferometer by measuring subsets of an
optical surface and "stitching" those measurements together,
creating a map of the entire surface automatically. QED is
dedicated to providing revolutionary solutions that enable or
significantly enhance capabilities and positively impact the bottom
line. Additional information can be found at www.qedmrf.com. SAFE
HARBOR STATEMENT This news release may include statements that
constitute "forward looking statements" within the meaning of
federal securities regulations. These forward-looking statements
include statements related to future sales and operating results,
company and industry growth and trends, growth of the markets in
which the company participates, international events, product
performance, new product introductions, development of new
products, technologies and markets, the acquisition of or
investment in other entities or assets, including intellectual
property, and the construction of new facilities by Cabot
Microelectronics Corporation. These forward-looking statements
involve a number of risks, uncertainties, and other factors,
including those described from time to time in Cabot
Microelectronics' filings with the Securities and Exchange
Commission (SEC), that could cause actual results to differ
materially from those described by these forward-looking
statements. In particular, see "Risk Factors" in Other Information
in our quarterly report on Form 10-Q for the quarter ended March
31, 2006, and "Risks Relating to Our Business" in Management's
Discussion and Analysis in our annual report on Form 10-K for the
fiscal year ended September 30, 2005, both filed with the SEC.
Cabot Microelectronics Corporation assumes no obligation to update
this forward looking information.
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