MKS Instruments, Inc. (NASDAQ: MKSI) (“MKS”), a global provider of
technologies that enable advanced processes and improve
productivity, today announced that it has entered into a
definitive agreement pursuant to
which MKS will acquire Photon Control
Inc. (TSX:PHO) for CAD$3.60 per share, in an all-cash
transaction valued at approximately CAD$387 million, with an
estimated enterprise value of CAD$343 million.
Photon Control is headquartered in Richmond,
British Columbia, Canada and had revenues
of CAD$65 million and Adjusted EBITDA of CAD$23
million in 2020. The transaction is expected to be accretive to
MKS’ Non-GAAP net earnings within the first 12 months
post-closing.
“We believe the Photon Control acquisition will help us deliver
on one of our long-term strategic objectives, which is to broaden
our portfolio of key technologies to better serve our customers,”
said MKS President and CEO John T.C. Lee. “We anticipate the
acquisition will further advance the MKS strategy to enhance
our Surround the Chamber® offering by adding optical sensors for
temperature control for critical etch and deposition applications
in semiconductor wafer fabrication. In addition, Photon Control is
a strong strategic fit with similar culture and vision to MKS.”
The transaction has been approved by the MKS and Photon
Control boards of directors and is subject to customary closing
conditions, including approval
by Photon Control’s securityholders and court approval in the
Province of British Columbia, Canada, and is expected to close in
the third quarter of 2021.
Greenhill & Co. is acting as financial
advisor and Stikeman Elliott is acting as legal advisor
to MKS.
About MKS InstrumentsMKS Instruments, Inc. is a
global provider of instruments, systems, subsystems and process
control solutions that measure, monitor, deliver, analyze, power
and control critical parameters of advanced manufacturing processes
to improve process performance and productivity for our customers.
Our products are derived from our core competencies in pressure
measurement and control, flow measurement and control, gas and
vapor delivery, gas composition analysis, electronic control
technology, reactive gas generation and delivery, power generation
and delivery, vacuum technology, lasers, photonics, optics,
precision motion control, vibration control and laser-based
manufacturing systems solutions. We also provide services relating
to the maintenance and repair of our products, installation
services and training. Our primary served markets include
semiconductor, industrial technologies, life and health sciences,
and research and defense. Additional information can be found
at www.mksinst.com.
Non-GAAP Financial MeasuresThis press release
refers to forward-looking Non-GAAP net earnings, a financial
measure that is not in accordance with U.S. generally accepted
accounting principles (“U.S. GAAP”). Non-GAAP net earnings should
be viewed in addition to, and not as a substitute for, GAAP
net earnings, and may be different from Non-GAAP net earnings used
by other companies. In addition, Non-GAAP net earnings is not based
on any comprehensive set of accounting rules or principles. MKS
management believes the presentation of Non-GAAP net earnings is
useful to investors for evaluating the acquisition by MKS of Photon
Control and the projected future operating and financial results of
MKS.
MKS is not providing a quantitative reconciliation of
forward-looking Non-GAAP net earnings to GAAP net earnings because
it is unable to estimate with reasonable certainty the ultimate
timing or amount of certain significant items without unreasonable
efforts. These items include, but are not limited to, acquisition
and integration costs, acquisition inventory step-up, amortization
of intangible assets, restructuring and other expense, asset
impairment, and the income tax effect of these items. These items
are uncertain, depend on various factors, and could have a material
impact on U.S. GAAP reported results for the relevant
period.
This press release also includes a reference to
the Adjusted EBITDA of Photon Control Inc., which is a
Non-GAAP measure in Canada. Photon Control
Inc. defines Adjusted EBITDA as earnings before
finance income, accretion expense on contingent consideration,
income taxes, depreciation of property and equipment,
amortization of intangible assets and foreign exchange
loss. Please refer to “Non-GAAP Measures” in Photon
Control Inc.’s annual management’s discussion and
analysis for the year ended December 31, 2020 for a
discussion of Non-GAAP measures used by Photon Control Inc., and to
“December 2020 Financial Performance Overview – Net Income and
Adjusted EBITDA” for a reconciliation of Photon Control Inc.’s
Adjusted EBITDA to net income. Copies of Photon Control
Inc.’s consolidated financial statements and related notes for the
year ended December 31, 2020 and of the accompanying
MD&A can be found on SEDAR under Photon Control
Inc.’s profile at www.sedar.com.
Safe Harbor for Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding the future financial
performance, business prospects and growth of MKS, and the expected
time of closing. These statements are only predictions based on
current assumptions and expectations. Any statements that are not
statements of historical fact (including statements containing the
words “will,” “projects,” “intends,” “believes,” “plans,”
“anticipates,” “expects,” “estimates,” “forecasts,” “continues” and
similar expressions) should be considered to be forward-looking
statements. Actual events or results may differ materially from
those in the forward-looking statements set forth herein. Among the
important factors that could cause actual events to differ
materially from those in the forward-looking statements are the
failure or inability of Photon Control or MKS to meet the closing
conditions, including obtaining necessary Photon Control
securityholder and court approvals, or to otherwise consummate the
transaction, the ability to successfully operate or integrate the
Photon Control business into MKS, the ability to retain and
integrate Photon Control employees into MKS, the ability to realize
the expected benefits of the acquisition, and the other factors
described in MKS’ Annual Report on Form 10-K for the year ended
December 31, 2020 and any subsequent Quarterly Reports on Form
10-Q, as filed with the SEC. MKS is under no obligation to, and
expressly disclaims any obligation to, update or alter these
forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this press
release.
MKS Contacts:Investor
Relations:David RyzhikVice President, Investor RelationsTelephone:
(978) 557-5180Email: david.ryzhik@mksinst.com
Press Relations:Bill CaseySenior Director,
Marketing CommunicationsTelephone: (630)
995-6384Email: bill.casey@mksinst.com
Tom Davies / Jeremy FieldingKekst CNC Press
LiaisonsEmails: tom.davies@kekstcnc.com /
jeremy.fielding@kekstcnc.com
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