Lam Research Corp. (NASDAQ: LRCX) and Novellus Systems, Inc.
(NASDAQ: NVLS)
- Acquisition expected to be accretive within one year of
transaction close
- Significant synergies expected to accelerate Lam's revenue and
earnings growth
- Lam announces $1.6 billion stock repurchase program
- Live conference call and webcast today at 6:15 p.m. EST, 3:15
p.m. PST
Lam Research Corp. (NASDAQ: LRCX) today announced that it has
entered into a definitive merger agreement to acquire Novellus
Systems, Inc. (NASDAQ: NVLS) in an all-stock transaction valued at
approximately $3.3 billion. The combined enterprise, which will
retain the name of Lam Research Corp., will be a semiconductor
equipment company with a broad portfolio of market-leading products
and multiple opportunities to drive value creation through
significant revenue and cost synergies. Total cost synergies are
expected to be approximately $100 million on an annualized basis by
the fourth quarter of 2013. In addition, Lam announced a $1.6
billion common stock repurchase program. This new program, which
replaces Lam's existing share repurchase program, is targeted to be
executed over the 12 months following the close of the transaction.
Lam expects the transaction to be accretive to its non-GAAP
earnings within one year after transaction close.
Lam Research and Novellus Systems are among the world's largest
manufacturers of semiconductor equipment, both companies playing a
pivotal role in defining the features and capabilities of
next-generation devices. The two companies possess complementary
product capabilities, with Lam's leadership in etch and
single-wafer clean equipment aligning with Novellus's leadership in
thin-film deposition and surface preparation technologies. The
combined company will be well-positioned to lead the industry
through critical technology transitions including 3D structures in
advanced logic and NAND memory as well as the scaling to 450 mm
wafers. The combined company will also be positioned to grow
revenue at a faster rate than either company could achieve
individually by:
- Advancing technical benefits from owning adjacent
technologies;
- Optimizing and accelerating collective development of
next-generation tools; and
- Further developing complementary customer relationships.
Under the terms of the agreement, Novellus stockholders will
receive 1.125 shares of Lam Research common stock for each share of
Novellus that they own, in a tax-free exchange. Based on the
closing price of Lam's stock on December 14, 2011, the transaction
values Novellus at a price of $44.42 per common share. Upon
closing, Lam and Novellus stockholders will own approximately 59
percent and 41 percent, respectively, of the combined company.
Lam's $1.6 billion stock repurchase program will be funded from
the combined company's existing on-shore cash and on-shore cash
generation. Assuming completion of the stock repurchase program,
this will essentially result in a total financial impact on the
company as if the deal were structured with approximately 48
percent cash.
"This strategic combination positions Lam Research to lead the
development of next-generation semiconductor manufacturing
technology and productivity solutions at a time when growing
semiconductor demand and increased device complexity are creating
significant business opportunities," said Steve Newberry, vice
chairman and chief executive officer of Lam Research. "Novellus's
strong capabilities and market leadership in deposition and surface
preparation technologies enable Lam to become more deeply
entrenched in critical semiconductor manufacturing processes that
are important to our customers. We believe the adjacency of our
process technologies will provide significant technical benefits
that will enable us to achieve greater success together and
accelerate our growth."
Richard Hill, chairman and chief executive officer of Novellus,
said, "We believe the combination of Lam and Novellus is great news
for our customers, investors and employees. The complementary
skills, technologies and product offerings of Lam and Novellus will
create a strong platform for delivering innovative and
cost-effective solutions. For our investors, it presents an ability
to participate in the combined company's future value creation
potential."
Martin Anstice, who, as previously announced, will assume the
position of CEO of Lam Research from Steve Newberry effective
January 1, 2012, will continue as CEO following the close of the
transaction. He is currently Lam's president and chief operating
officer. Timothy Archer, chief operating officer of Novellus, will
become chief operating officer of the combined company; and Ernest
Maddock, chief financial officer of Lam, will remain chief
financial officer. The board of directors of Lam will add four new
directors jointly nominated by Lam and Novellus.
Anstice said, "We are excited to join forces with a remarkable
company like Novellus. We believe that the people, products and
technology that Novellus brings to Lam Research will position the
combined company to accelerate revenue and earnings growth, realize
significant operating efficiencies, and deliver stockholder value.
Together, we believe that we will be able to optimize technology
and product roadmaps, strengthen our competitive position in the
market, and leverage complementary customer relationships to
accelerate growth."
The closing of the transaction is subject to customary
conditions, including approval by Lam's and Novellus's stockholders
and review by U.S. and international regulators. The companies
expect the transaction, which has been unanimously approved by both
Lam's and Novellus's boards of directors, to close in the second
calendar quarter of 2012.
Goldman, Sachs & Co. acted as the exclusive financial
advisor, and Jones Day acted as legal counsel to Lam. BofA Merrill
Lynch acted as the exclusive financial advisor, and Morrison &
Foerster LLP acted as legal counsel to Novellus.
Conference Call and Webcast Information
The companies will hold a joint conference call and webcast today
at 6:15 p.m. EST (3:15 p.m. PST) to discuss this announcement. The
conference call can be monitored by dialing 1-888-549-7750,
passcode 4498125, within the U.S. and 1-480-629-9770, passcode
4498125, for all other locations. The webcast can be accessed via
Lam's IR website at http://investor.lamresearch.com and Novellus's
IR website at http://ir.novellus.com. A replay of the webcast will
be available for three weeks following the call at
http://investor.lamresearch.com and http://ir.novellus.com.
About Lam Research Lam Research Corp. is a
major supplier of wafer fabrication equipment and services to the
world's semiconductor industry, where the company has been
advancing semiconductor manufacturing for more than 30 years. As a
technology and market share leader in plasma etch and single-wafer
clean, Lam Research is leveraging its combined expertise to address
some of today's most advanced semiconductor processing challenges.
Headquartered in Fremont, Calif., Lam Research maintains a global
network of service facilities throughout North America, Asia, and
Europe to meet the complex and changing needs of its global
customer base. Lam's common stock trades on The NASDAQ Global
Select MarketSM under the symbol LRCX. Lam Research is a
NASDAQ-100® company. For more information, visit http://www.lamresearch.com.
About Novellus Systems Novellus Systems,
Inc. (NASDAQ: NVLS) is a leading provider of advanced process
equipment for the global semiconductor industry. The company's
products deliver value to customers by providing innovative
technology backed by trusted productivity. An S&P 500 company,
Novellus is headquartered in San Jose, Calif. with subsidiary
offices across the globe. For more information, please visit
www.novellus.com.
More Resources: More information about
this transaction, including today's conference call transcript and
Form 8-K disclosure will be available on Lam's IR website at
http://investor.lamresearch.com. and on Novellus's IR website at http://ir.novellus.com.
How to Find Further Information This
communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. In connection with the
proposed merger, Lam Research intends to file with the SEC a
registration statement on Form S-4 that will include a joint proxy
statement of Lam Research and Novellus Systems that also
constitutes a prospectus of Lam Research. Lam Research and Novellus
Systems will furnish the joint proxy statement/prospectus and other
relevant documents to their respective security holders in
connection with the proposed merger of Lam Research and Novellus
Systems. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, WE URGE
SECURITY HOLDERS AND INVESTORS TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT LAM RESEARCH AND NOVELLUS
SYSTEMS AND THE PROPOSED MERGER. The proposals for the merger will
be made solely through the joint proxy statement/prospectus. In
addition, a copy of the joint proxy statement/prospectus (when it
becomes available) may be obtained free of charge from Lam Research
Corporation, Investor Relations, 4650 Cushing Parkway, Fremont, CA
94538-6401, or from Novellus Systems, Investor Relations, 4000
North First Street, San Jose, CA 95134. Security holders will be
able to obtain, free of charge, copies of the joint proxy
statement/prospectus and S-4 Registration Statement and any other
documents filed by Lam Research or Novellus Systems with the SEC in
connection with the proposed Merger at the SEC's website at
http://www.sec.gov, and at the companies' websites at
www.lamresearch.com and www.novellus.com, respectively.
Forward-Looking Statements This
announcement contains, or may contain, "forward-looking statements"
concerning Lam Research and Novellus Systems (together such
companies and their subsidiaries being the "Merged Company"), which
are subject to the safe harbor provisions created by the Private
Securities Litigation Reform Act of 1995. Generally, the words
"believe," "anticipate," "expect," "may," "should," "could," and
other future-oriented terms identify forward-looking statements.
Forward-looking statements include, but are not limited to,
statements relating to the following: (i) the expected benefits of
the Merger and the repurchase program, the expected accretive
effect of the Merger and the repurchase program on the Merged
Company's financial results, expected cost, revenue, technology and
other synergies, the expected impact for customers, employees and
end-users, future capital expenditures, expenses, revenues,
earnings, economic performance, financial condition, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of Lam Research's or Novellus Systems'
operations; (iii) the effects of government regulation on Lam
Research's, Novellus Systems' or the Merged Company's business;
(iv) future industry developments and trends; (v) the other
statements set forth in the CEO quotes; (vi) the anticipated timing
of shareholder meetings and completion of the proposed merger and
the repurchase program; and (vii) assumptions underlying any of the
foregoing statements.
These forward-looking statements are based upon the current
beliefs and expectations of the management of Lam Research and
Novellus Systems and involve risks and uncertainties that could
cause actual results to differ materially from those expressed in
the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond Lam Research's and
Novellus Systems' ability to control or estimate precisely and
include, without limitation: the ability to obtain governmental or
stockholder approvals of the Merger or to satisfy other conditions
to the Merger on the proposed terms and timeframe; the possibility
that the Merger does not close when expected or at all, or that the
companies may be required to modify aspects of the Merger to
achieve regulatory approval; the ability to realize the expected
synergies or other benefits from the transaction in the amounts or
in the timeframe anticipated; the potential harm to customer,
supplier, employee and other relationships caused by the
announcement or closing of the Merger; the ability to integrate
Novellus Systems' and Lam Research's businesses in a timely and
cost-efficient manner; uncertainties in the global economy and
credit markets; unanticipated trends with respect to the
cyclicality of the semiconductor industry; and rates of change in,
future shipments, margins, market share, capital expenditures,
revenue and operating expenses generally; volatility in quarterly
results and in the stock price of the Merged Company; customer
requirements and the ability to satisfy those requirements;
customer capital spending and their demand for the Merged Company's
products; the ability to defend the Merged Company's market share
and to gain new market share; anticipated growth in the industry
and the total market for wafer-fabrication and support equipment
and the Merged Company's growth relative to such growth; levels of
research and development ("R&D") expenditures; the estimates
made, and the accruals recorded, in order to implement critical
accounting policies (including but not limited to the adequacy of
prior tax payments, future tax liabilities and the adequacy of the
Merged Company's accruals relating to them); access to capital
markets; the ability to manage and grow the Merged Company's cash
position; the sufficiency of the Merged Company's financial
resources to support future business activities (including but not
limited to the repurchase program, operations, investments, debt
service requirements and capital expenditures); inventory levels
and inventory valuation adjustments; the impact of legal
proceedings; unexpected shipment delays which adversely impact
shipment volumes; inaccuracies related to the timing and
satisfaction of remaining obligations related to vacated leases;
the inability to recover the amortized cost of investments in
auction-rate securities, market changes negatively affecting
auction-rate securities and the government's inability to guarantee
the underlying securities; the inability to enforce the Merged
Company's patents and protect its trade secrets; and other risks
and uncertainties, including those detailed from time to time in
Lam Research's and Novellus Systems' periodic reports (whether
under the caption Risk Factors or Forward Looking Statements or
elsewhere). Neither Lam Research nor Novellus Systems can give any
assurance that such forward-looking statements will prove to have
been correct. The reader is cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this announcement. Neither Lam Research nor Novellus
Systems nor any other person undertakes any obligation to update or
revise publicly any of the forward-looking statements set out
herein, whether as a result of new information, future events or
otherwise, except to the extent legally required.
Nothing contained herein shall be deemed to be a forecast,
projection or estimate of the future financial performance of Lam
Research, Novellus Systems, or the Merged Company, following the
implementation of the Merger or otherwise. No statement in this
announcement should be interpreted to mean that the earnings per
share, profits, margins or cash flows of Lam Research or the Merged
Company for the current or future financial years would necessarily
match or exceed the historical published figures.
Participants in the Solicitation The
directors and executive officers of Lam Research and Novellus
Systems may be deemed to be participants in the solicitation of
proxies in connection with the approval of the proposed
transaction. Lam Research plans to file the registration statement
that includes the joint proxy statement/prospectus with the SEC in
connection with the solicitation of proxies to approve the proposed
transaction. Information regarding Lam Research's directors and
executive officers and their respective interests in Lam Research
by security holdings or otherwise is available in its Annual Report
on Form 10-K filed with the SEC on August 19, 2011 and its Proxy
Statement on Schedule 14A filed with the SEC on September 19, 2011.
Information regarding Novellus Systems' directors and executive
officers and their respective interests in Novellus Systems by
security holdings or otherwise is available in its Annual Report on
Form 10-K filed with the SEC on February 25, 2011 and its Proxy
Statement on Schedule 14A filed with the SEC on April 8, 2011.
Additional information regarding the interests of such potential
participants is or will be included in the joint proxy
statement/prospectus and registration statement, and other relevant
materials to be filed with the SEC, when they become available,
including in connection with the solicitation of proxies to approve
the proposed transaction and to elect directors.
Lam Research Contacts: Ed Rebello Corporate
Communications +1-510-572-6603 edward.rebello@lamresearch.com
Shanye Hudson Investor Relations +1-510-572-4589
shanye.hudson@lamresearch.com Novellus Systems Contact:
Robin S. Yim Investor Relations + 1-408-943-9700
robin.yim@novellus.com
Lam Research (NASDAQ:LRCX)
Historical Stock Chart
From May 2024 to Jun 2024
Lam Research (NASDAQ:LRCX)
Historical Stock Chart
From Jun 2023 to Jun 2024