Applied Materials to Acquire Kokusai Electric
July 01 2019 - 6:00AM
Applied Materials, Inc. (“Applied”) (Nasdaq: AMAT) today announced
a definitive agreement under which Applied will acquire all
outstanding shares of Kokusai Electric Corporation (“Kokusai
Electric”) for $2.2 billion in cash from global investment firm
KKR.
Kokusai Electric is a leading company in providing
high-productivity batch processing systems and services for memory,
foundry and logic customers. These systems complement Applied’s
leadership portfolio in single-wafer processing systems. Kokusai
Electric has strong customer relationships, world-class supply
chain and manufacturing capabilities in Japan and Asia, and a
talented team of employees.
Following the close of the transaction, Kokusai Electric will
operate as a business unit of Applied’s Semiconductor Products
Group and continue to be based in Tokyo, with technology and
manufacturing centers in Toyama, Japan and Cheonan, Korea. The
acquisition is expected to be immediately accretive to Applied’s
non-GAAP earnings per share at close.
The transaction has been approved by the Applied Materials Board
of Directors. The transaction is expected to close within
approximately 12 months and is subject to regulatory approvals and
other customary closing conditions.
“Kokusai Electric has a strong culture of innovation along with
excellent customer relationships and serves fast-growing areas of
the wafer fab equipment market,” said Gary Dickerson, president and
CEO of Applied Materials. “By bringing Kokusai Electric’s talented
team into Applied, we believe we will accelerate innovation for
customers and create significant value for our shareholders.”
“The opportunity to combine with Applied Materials will be very
attractive for Kokusai Electric’s customers and employees alike,”
said Fumiyuki Kanai, president and CEO of Kokusai Electric. “We are
excited about the opportunity to integrate Kokusai Electric’s
experienced team with Applied’s global development, customer
support and services capabilities. We believe the combination will
accelerate our ability to bring exciting new technologies to
customers.”
Applied expects to finance the transaction using a combination
of balance sheet cash and a term loan facility. Following the close
of the transaction, the company will prioritize repayment of the
term loan balance while maintaining its long-term commitment to
return cash to shareholders through dividends and share
repurchases.
Goldman Sachs & Co. LLC served as exclusive financial
advisor, and Hogan Lovells and Cleary Gottlieb Steen & Hamilton
LLP served as legal counsel for Applied Materials.
Conference Call and Webcast
Today at 8:00 a.m. EDT (5:00 a.m. PDT), Applied Materials will
host a conference call and webcast related to the announcement. The
live webcast along with a replay will be available on the company’s
website at www.appliedmaterials.com.
About Applied Materials
Applied Materials, Inc. (Nasdaq: AMAT) is the leader in
materials engineering solutions used to produce virtually every new
chip and advanced display in the world. Our expertise in modifying
materials at atomic levels and on an industrial scale enables
customers to transform possibilities into reality. At Applied
Materials, our innovations make possible the technology shaping the
future. Learn more at www.appliedmaterials.com.
About Kokusai Electric
Kokusai Electric is a leading company in providing
high-productivity batch processing systems and services for memory,
foundry and logic customers. Kokusai Electric produces
semiconductor manufacturing equipment that leverages world-class
coating technology, delivering products and services to the world’s
top manufacturers. Kokusai Electric enables the increasingly high
functionality and high performance of semiconductors.
Forward-Looking Statements
This press release contains forward-looking statements,
including those regarding Applied's proposed acquisition of Kokusai
Electric; the impact on Applied’s earnings, gross and operating
margins, strategic position, product and service offerings in
semiconductor and services markets, ability to serve customers'
requirements, and delivery of long-term value to stockholders;
benefits to Applied’s and Kokusai Electric’s customers, employees
and stockholders; financing activities and usage of cash in
connection with and after the proposed acquisition; and all
statements other than those of historical fact. Forward-looking
statements may contain words such as “expect,” “believe,” “may,”
“can,” “should,” “will,” “forecast,” “anticipate” or similar
expressions, and include the assumptions that underlie such
statements. These statements are subject to known and unknown risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements.
Risks and uncertainties include but are not limited to: the ability
of the parties to consummate the proposed acquisition in a timely
manner or at all; satisfaction of the conditions precedent to
consummation of the proposed acquisition, including the ability to
secure regulatory approvals in a timely manner and upon terms
anticipated by the parties or at all; the possibility of or an
increase in litigation and other claims (including related to the
transaction itself); successful completion of anticipated financing
arrangements; Applied’s ability to successfully integrate Kokusai
Electric’s operations, product and service lines, technology and
employees and realize expected synergies from the proposed
acquisition; disruptions of Applied’s and Kokusai Electric’s
current plans, operations and relationships with customers,
suppliers and employees caused by the announcement and pendency of
the proposed acquisition; unknown, underestimated or undisclosed
commitments or liabilities; the level of demand for the combined
companies' products and services, which is subject to many factors,
including uncertain global economic and industry conditions, demand
for electronic products and semiconductors, and customers' new
technology and capacity requirements; Applied’s ability to (i)
develop, deliver and support a broad range of products and
services, expand its markets and develop new markets, (ii) timely
align its cost structure with business conditions, and (iii)
attract, motivate and retain key employees of Applied and Kokusai
Electric; and other risks and uncertainties described in Applied’s
SEC filings, including its most recent Forms 10-Q and 8-K. All
forward-looking statements are based on management’s estimates,
projections and assumptions as of the date hereof. Neither Applied
nor Kokusai Electric undertakes any obligation to update any
forward-looking statements.
Contact:Ricky Gradwohl
(editorial/media) 408.235.4676Michael Sullivan (financial
community) 408.986.7977
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