Versum Materials, Entegris Announce Stock-Swap Merger Deal--Update
January 28 2019 - 07:27AM
Dow Jones News
By Dana Mattioli
Versum Materials Inc. said it plans to combine with Entegris
Inc. in a merger that unites two chemical companies that make
critical components for the semiconductor industry.
Versum and Entegris announced Monday a stock-for-stock merger in
which Versum stockholders will receive 1.120 shares of Entegris for
each existing Versum share. Upon completion of the merger, Entegris
stockholders will own 52.5% of the combined company, and Versum
stockholders 47.5%.
The combined company, which will have a market value of nearly
$8 billion based on Friday's closing prices, will supply products
for purifying, protecting and transporting materials used in the
manufacturing process in the semiconductor and other high-tech
industries.
The company will retain the Entegris name and will be
headquartered in Billerica, Mass., with a strong operational
presence in Tempe, Arizona.
The Wall Street Journal reported news of the merger Sunday
evening.
Entegris, with a market value of $4.4 billion, is no stranger to
deal making. The company was founded in 1966 as Fluoroware.
Following a merger 20 years ago, it rebranded as Entegris and went
public in 2000. Five years later, the company expanded through
another merger, this time with Mykrolis Corp. In 2014, Entegris
bought electronic-chemicals supplier ATMI Inc. It now has about
3,500 employees.
Versum, based in Tempe, Ariz., was once part of industrial-gas
maker Air Products & Chemicals Inc., before it was spun off in
2016. It had a market value of $3.5 billion as of Friday's
close.
Entegris Chief Executive Bertrand Loy will serve as CEO of the
new company, with Entegris Chief Financial Officer Greg Graves as
CFO. Mr. Loy became part of Entegris in 2005 as part of its merger
with Mykrolis. Versum Materials general counsel Michael Valente
will serve as general counsel of the combined company. Entegris is
to get five board seats while Versum is expected to have the
remaining four.
The development of the "Internet of Things" is providing
semiconductor companies with new avenues of growth as more and more
items -- from autos to household products -- become "smart." A wave
of consolidation has swept the industry in recent years as chip
makers seek to better position themselves in the changing
landscape, and that could give their suppliers an incentive to gain
heft through dealmaking too.
Versum's sales rose 22% to $1.37 billion in the fiscal year
ended Sept. 30, while its net income increased slightly to $204.7
million. At Entegris, sales in the nine months ended in September
rose 16% from the same period a year earlier to $1.15 billion. Net
income jumped 41% to $160 million.
The deal adds to what is shaping up to be another busy year for
mergers, despite stock-market volatility and political uncertainty.
Earlier this month, pharmaceutical maker Bristol-Myers Squibb Co.
agreed to buy Celgene Corp. for $74 billion and
financial-technology company Fiserv Inc. agreed to purchase First
Data Corp. for $22 billion.
The chemicals industry also has been busy consolidating in
recent years, with Dow Chemical Co. and DuPont Co. combining and
industrial-gas companies Praxair Inc. and Linde AG also agreeing to
come together.
Write to Dana Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
January 28, 2019 07:12 ET (12:12 GMT)
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