MKS Instruments, Inc. (NASDAQ: MKSI) (“MKS”), a global
provider of technologies that enable advanced processes and improve
productivity, and Atotech Limited (NYSE: ATC) (”Atotech”), a
leading process chemicals technology company and a market leader in
advanced electroplating solutions, today announced that they
have entered into a definitive agreement pursuant to which MKS will
acquire Atotech for $16.20 in cash and 0.0552 of a
share of MKS common stock for each Atotech common share. The equity
value of the transaction is $5.1 billion and the enterprise value
of the transaction is approximately $6.5 billion.
The transaction will result in pro forma annual revenue of $3.8
billion1 and is expected to be accretive to MKS’ Non-GAAP net
earnings per share within the first year and additive to MKS’ free
cash flow. MKS expects to realize $50 million in
annualized cost synergies within 18 to 36 months.
“Together, MKS and Atotech will be uniquely positioned to drive
faster, better solutions and innovations for customers in advanced
electronics,” said MKS President and CEO John T.C. Lee.
“By combining leading capabilities in lasers, optics, motion and
process chemistry, the combined company will optimize the PCB
Interconnect, a significant enabling point of next-generation
advanced electronics that represents the next frontier for
miniaturization and complexity. We anticipate the addition of
Atotech will position MKS to enable roadmaps for future generations
of advanced electronics devices. The acquisition of Atotech also
provides MKS with a recurring revenue stream from a consumables
portfolio for leading-edge devices, with meaningful scale and
potential on which to build.”
MKS and Atotech have complementary customer solutions in key
advanced electronics markets, with MKS’ expertise in via drilling
and Atotech in electroplating. PCBs are becoming increasingly
complex as miniaturization is creating new challenges where
reliability, productivity and peak performance are critical. The
roadmap for next generation interconnects continues to accelerate
the need for more integrated solutions that enable yield and
throughput gains.
"The combination of Atotech’s expertise in electroplating and
chemistry and MKS’ strengths in lasers, laser systems, optics and
motion will enable innovative and ground-breaking solutions for
customers in the areas of materials processing and complex
applications. This transaction is an excellent outcome for our
shareholders, and we believe it will provide immediate value and
the opportunity to benefit from the upside potential of the
combined company,” said Geoff Wild, CEO of Atotech.
MKS intends to fund the cash portion of the transaction with a
combination of available cash on hand and committed debt
financing. The combined company is expected to have pro forma
net cash and investments of approximately $800 million and total
debt outstanding of $5.3 billion at closing, with an estimated
gross leverage ratio of under 4.0 times and net leverage ratio of
under 3.5 times.2 MKS has also obtained a commitment to
replace its current $100 million asset-based revolving credit
facility with a $500 million revolving credit facility.
The transaction, expected to be implemented by way of a scheme
of arrangement of Atotech under the laws of Jersey, has been
unanimously approved by the MKS and Atotech boards of directors and
is subject to Atotech shareholder approval, approval of the Royal
Court of Jersey, regulatory approvals, and other customary closing
conditions, and is expected to close by the fourth quarter of 2021.
Carlyle and its affiliates (“Carlyle”), owner of 79% of outstanding
Atotech common shares, have signed an irrevocable agreement to vote
in favor of the transaction. Eighty percent of shares owned by
Carlyle will be subject to a 30-day lock-up period post-closing and
60% of shares owned by Carlyle will be subject to a 60-day lock-up
period post-closing.
Perella Weinberg Partners is acting as financial advisor and DLA
Piper is acting as legal advisor to MKS. WilmerHale is acting
as legal advisor to MKS for the financing. J.P. Morgan and Barclays
Bank PLC provided committed financing for the transaction and were
advised by Paul Hastings. Credit Suisse is acting as financial
advisor and Latham and Watkins is acting as legal advisor
to Atotech. Carey Olsen is advising MKS and Ogier is advising
Atotech as to Jersey law matters.
___________________1. Consists of revenue for the last twelve
months as of March 31, 2021 for (i) MKS, (ii) Atotech, and (iii)
Photon Control Inc., the acquisition of which MKS expects to close
in the third quarter of 2021.2. Based on internal MKS estimate of
pro forma Adjusted EBITDA FY 2021, assuming the prior closings of
the acquisitions of Atotech and Photon Control Inc. Estimate also
includes $50 million of pro forma annual run rate cost
synergies.
Conference Call Details
MKS will hold a conference call to discuss this announcement on
July 1, 2021 at 8:30 a.m. (Eastern Time). To access a live webcast
of the conference call and related presentation materials
management will refer to during the call, visit MKS’ website at
mksinst.com and click on Company – Investor Relations. The webcast
and related presentation materials will be listed in the calendar
of events. To participate by telephone, please dial (877) 212-6076
for domestic callers and (707) 287-9331 for international callers,
provide the operator with Conference ID 1793197, and access the
presentation materials on MKS’ website. An archive of the webcast
and related presentation materials will be available on MKS’ and
Atotech’s websites.
About MKS Instruments
MKS 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.
About Atotech
Atotech is a leading specialty chemicals technology company and
a market leader in advanced electroplating solutions. Atotech
delivers chemistry, equipment, software, and services for
innovative technology applications through an integrated
systems-and-solutions approach. Atotech solutions are used in a
wide variety of end-markets, including smartphones and other
consumer electronics, communications infrastructure, and computing,
as well as in numerous industrial and consumer applications such as
automotive, heavy machinery, and household appliances.
Atotech, headquartered in Berlin, Germany, is a team of 4,000
experts in over 40 countries generating annual revenue of
$1.2 billion in 2020. Atotech has manufacturing operations
across Europe, the Americas, and Asia. With its well-established
innovative strength and industry-leading global TechCenter network,
Atotech delivers pioneering solutions combined with unparalleled
on-site support for over 9,000 customers worldwide. For more
information about Atotech, please visit us at www.atotech.com.
As noted at the time of Atotech’s public offering, Atotech is
not a company subject to regulation under the City Code on
Takeovers and Mergers (the ”UK Takeover Code”), therefore no
dealing disclosures are required to be made under Rule 8 of the UK
Takeover Code by shareholders of MKS or Atotech.
Financial Information; Presentation of Combined
Information
Except as otherwise indicated, all financial information of MKS
has been reported in accordance with U.S. generally accepted
accounting principles (“GAAP”) and all financial information of
Atotech has been reported in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board.
The combined financial information set forth herein has not been
prepared in accordance with Article 11 of Regulation S-X but rather
represents a combination of MKS’ results with the results of
Atotech and Photon Control Inc., MKS’ acquisition of which is
expected to close in the third quarter of 2021. Except as otherwise
stated herein, Atotech financial information has not been conformed
to the accounting principles (GAAP) and accounting policies
followed by MKS. Combined financial information pursuant to Article
11 could differ materially from the combined information presented
herein.
Use of Non-GAAP Financial Measures
This press release includes financial measures that are not in
accordance with GAAP (“Non-GAAP financial measures”) and financial
measures that are not in accordance with IFRS (“Non-IFRS financial
measures”). These Non-GAAP financial measures and Non-IFRS
financial measures should be viewed in addition to, and not as a
substitute for, MKS’ and Atotech’s reported GAAP and IFRS results,
and may be different from Non-GAAP financial measures and Non-IFRS
financial measures used by other companies. In addition, these
Non-GAAP financial measures and Non-IFRS financial measures are not
based on any comprehensive set of accounting rules or principles.
MKS management believes the presentation of these Non-GAAP
financial measures and Non-IFRS financial measures is useful to
investors for comparing prior periods and analyzing ongoing
business trends and operating results.
MKS is not providing a quantitative reconciliation of
forward-looking Non-GAAP net earnings to GAAP net income or
forward-looking Adjusted EBITDA to GAAP net income because it is
unable to estimate with reasonable certainty the ultimate timing or
amount of certain significant items without unreasonable efforts.
For forward-looking Non-GAAP net earnings to GAAP net income, these
items include, but are not limited to, acquisition and integration
costs, amortization of intangible assets, amortization of the
step-up of inventory to fair value, restructuring and other
expense, asset impairment, and the income tax effect of these
items. For forward-looking Adjusted EBITDA to GAAP net income,
these items include, but are not limited to, net interest expense,
depreciation expense, acquisition and integration costs,
amortization of intangible assets, restructuring and other expense,
asset impairment, the income tax effect of these items, and the
provision for income taxes. MKS is also not providing a
quantitative reconciliation of forward-looking free cash flow to
operating cash flow because it is unable to estimate with
reasonable certainty the ultimate timing or amount of capital
expenditures without unreasonable efforts, in addition to the
timing of payments for acquisition and integration costs and
restructuring and other expense, among other items, which will
affect operating cash flow. All of these items are uncertain,
depend on various factors, and could have a material impact on GAAP
reported results for the relevant period.
Safe Harbor for Forward-Looking
Statements
Statements in this press release regarding the proposed
transaction between MKS and Atotech (the “transaction”), the
expected timetable for completing the transaction, future financial
and operating results and metrics for the combined company,
including to reflect MKS’ acquisition of Photon Control Inc., which
is expected to close in the third quarter of 2021, benefits and
synergies of the transaction, future opportunities for the combined
company and any other statements about MKS’ or Atotech’s
managements’ future expectations, beliefs, goals, plans or
prospects constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. 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 also be
considered to be forward-looking statements. These statements are
only predictions based on current assumptions and expectations.
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 ability of the
parties to complete the transaction; the ability of MKS to complete
its acquisition of Photon Control Inc., which is expected to close
in the third quarter of 2021; the risk that the conditions to the
closing of the transaction, including receipt of required
regulatory approvals and approval of Atotech shareholders, are not
satisfied in a timely manner or at all; the terms of MKS’ existing
term loan, the terms and availability of financing for the
transaction, the substantial indebtedness the Company expects to
incur in connection with the transaction and the need to generate
sufficient cash flows to service and repay such debt; litigation
relating to the transaction; unexpected costs, charges or expenses
resulting from the transaction; the risk that disruption from the
transaction materially and adversely affects the respective
businesses and operations of MKS and Atotech; restrictions during
the pendency of the transaction that impact MKS’ or Atotech’s
ability to pursue certain business opportunities or other strategic
transactions; the ability of MKS to realize the anticipated
synergies, cost savings and other benefits of the transaction,
including the risk that the anticipated benefits from the
transaction may not be realized within the expected time period or
at all; competition from larger or more established companies in
the companies’ respective markets; MKS’ ability to successfully
grow Atotech’s business; potential adverse reactions or changes to
business relationships resulting from the announcement, pendency or
completion of the transaction; the ability of MKS to retain and
hire key employees; legislative, regulatory and economic
developments, including changing conditions affecting the markets
in which MKS and Atotech operate, including the fluctuations in
capital spending in the semiconductor industry and other advanced
manufacturing markets and fluctuations in sales to MKS’ and
Atotech’s existing and prospective customers; the challenges, risks
and costs involved with integrating the operations of the companies
we acquire; the impact of the COVID-19 pandemic and related private
and public measures on Atotech’s business; the ability of MKS to
anticipate and meet customer demand; manufacturing and sourcing
risks, including supply chain disruptions and component shortages;
potential fluctuations in quarterly results; dependence on new
product development; rapid technological and market change;
acquisition strategy; volatility of stock price; international
operations; financial risk management; and the other factors
described in MKS’ Annual Report on Form 10-K for the fiscal year
ended December 31, 2020 and any subsequent Quarterly Reports on
Form 10-Q, and Atotech’s Annual Report on Form 20-F for fiscal year
ended December 31, 2020 and any Reports on Form 6-K, each as filed
with the U.S. Securities and Exchange Commission (the “SEC”). MKS
and Atotech are under no obligation to, and expressly disclaim 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.
Additional Information and Where to Find
It
This communication does not constitute a solicitation of any
vote or approval. In connection with the proposed transaction,
Atotech plans to provide to its shareholders a circular containing
information on the anticipated scheme of arrangement vote regarding
the proposed transaction (the “Scheme Circular”). Atotech may also
file other documents with the SEC regarding the proposed
transaction. This document is not a substitute for the Scheme
Circular or any other document that may be filed by Atotech with
the SEC.
BEFORE MAKING ANY VOTING DECISION, ATOTECH’S SHAREHOLDERS ARE
URGED TO READ THE SCHEME CIRCULAR IN ITS ENTIRETY WHEN IT BECOMES
AVAILABLE AND ANY OTHER DOCUMENTS FILED BY ATOTECH WITH THE SEC IN
CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY
REFERENCE THEREIN BEFORE MAKING ANY VOTING OR INVESTMENT DECISION
WITH RESPECT TO THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE
PARTIES TO THE PROPOSED TRANSACTION.
Any vote in respect of resolutions to be proposed at Atotech
shareholder meetings to approve the proposed transaction, the
scheme of arrangement or related matters, or other responses in
relation to the proposed transaction, should be made only on the
basis of the information contained in Atotech’s Scheme Circular.
Shareholders may obtain a free copy of the Scheme Circular and
other documents Atotech files with the SEC (when available) through
the website maintained by the SEC at www.sec.gov. Scheme Circular
makes available free of charge on its investor relations website at
investors.atotech.com copies of materials it files with, or
furnishes to, the SEC.
No Offer or Solicitation
This communication is for information purposes only and is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer or invitation to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the proposed transaction
or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable
law.
The proposed transaction will be implemented solely pursuant to
the scheme of arrangement, subject to the terms and conditions of
the definitive agreement between MKS and Atotech, dated July 1,
2021, which contains the full terms and conditions of the proposed
transaction.
MKS Contacts: Investor
Relations: David Ryzhik Vice President,
Investor Relations Telephone: +1
978.557.5180 Email: david.ryzhik@mksinst.com Press
Relations: Bill Casey Senior Director, Marketing
Communications Telephone: +1
630.995.6384 Email: bill.casey@mksinst.com Tom Davies /
Jeremy Fielding Kekst CNC Emails:
tom.davies@kekstcnc.com/ jeremy.fielding@kekstcnc.com
Atotech Contacts:
Investor Relations & Communications:Sarah SprayVice
President, Global Head of Investor Relations & Communications+1
803.504.4731Email: sarah.spray@atotech.com
Patrick Ryan (USA) / Ruediger Assion (Germany)Edelman Emails:
patrick.ryan@edelman.com / ruediger.assion@edelman.com
MKS Instruments (NASDAQ:MKSI)
Historical Stock Chart
From Feb 2024 to Mar 2024
MKS Instruments (NASDAQ:MKSI)
Historical Stock Chart
From Mar 2023 to Mar 2024