Complementary products and increased scale will
benefit consolidated customer base
Combination increases served available market
(SAM) opportunity to approximately $3B
Global Scale: accelerates R&D in
complementary competencies while increasing worldwide customer
presence to support leading customers – from wafer fabrication
through final device packaging
Expected to generate at least $20M of annual
cost synergies
Nanometrics Incorporated (NASDAQ: NANO), a leading provider of
advanced process control metrology and software analytics, and
Rudolph Technologies, Inc. (NYSE: RTEC), a leading provider of
semiconductor process control systems, lithography equipment, and
software for wafer fabs and advanced packaging facilities, today
announced that they have agreed to combine in an all-stock merger
of equals transaction. The merged company will be a premier
end-to-end metrology, inspection, process control software, and
lithography equipment provider for the semiconductor industry and
other advanced markets.
Under the terms of the agreement, which was unanimously approved
by the Boards of Directors of both companies, Rudolph stockholders
will receive 0.8042 shares of Nanometrics common stock for each
Rudolph share. Upon completion of the merger, current Nanometrics
stockholders will own approximately 50% and current Rudolph
stockholders will own approximately 50% of the combined
company.
Rudolph CEO Michael Plisinski will serve as Chief Executive
Officer and Rudolph CFO Steven Roth will serve as Chief Financial
Officer of the combined company, alongside a highly experienced
leadership team comprised of executives from both companies. The
Board of Directors will be led by Nanometrics director Christopher
Seams and will have 12 directors, consisting of six from each
existing Board. The combined company will be headquartered in
Wilmington, Massachusetts and will maintain a strong presence at
Nanometrics’ headquarters in Milpitas, California.
Nanometrics President and Chief Executive Officer, Pierre-Yves
Lesaicherre said, “Nanometrics has a long history of innovation in
the field of optical metrology, pioneering the use of scatterometry
for semiconductor process control. In recent years, we have
established a strong position in optical critical dimension
metrology, enabling the ramp of advanced technology nodes by each
of the major semiconductor manufacturers worldwide. Our merger
announced today with Rudolph marks the culmination of our
respective businesses’ growth, diversification, and increased
scale. We believe the combined global support organizations,
technology development teams and product portfolio will create a
unique, end-to-end solution provider across the entire
semiconductor fabrication process. The combined company will be
able to provide improved device yield at reduced manufacturing
cycle time, supporting the accelerated product life cycles in the
semiconductor and other advanced markets.”
Rudolph Chief Executive Officer, Michael Plisinski added, “This
strategic transaction brings together two successful and
complementary teams and product portfolios. Nanometrics’ metrology
portfolio is a strong strategic fit with Rudolph’s current
diversified product lines including software, inspection,
metrology, and lithography. Our current set of products has already
created integrated solutions for the advanced packaging market, and
we expect to develop new integrated solutions for customers as we
are able to draw from an even larger set of products in the future.
Our customers are consolidating and rapidly innovating across the
complete value chain from front-end fabrication to packaging.
Bringing these two successful and complementary teams together
enables us to solve our customers’ high-value problems in the years
ahead. We look forward to joining forces to leverage our respective
strengths and talented teams to benefit all stakeholders.”
Key Strategic and Financial Benefits
The merger joins together two highly complementary, leading
semiconductor inspection and metrology companies. Investors,
customers, employees and all constituents are expected to benefit
from:
- Complementary Products: Nanometrics and Rudolph have
highly complementary portfolios. By bringing together front-end
metrology with inspection solutions, the new company will have the
opportunity to offer more comprehensive process control solutions
to the world’s leading semiconductor device manufacturers. These
served markets are also complementary, as the combined product
portfolio provides tools and software to customers producing
advanced nodes and specialty devices in the front-end along with
advanced packaging in the back-end. As customers continue to invest
in more advanced process control solutions, the combined technology
portfolio and established channels to these markets is expected to
accelerate the ability to serve both front-end and back-end
markets.
- Increases Served Markets: Each company currently has a
semiconductor industry SAM of at least $1B, with additional SAM
expansion opportunities of $400M to $500M per company. The
combination is expected to expand the companies’ served market
opportunity to approximately $3B. With each company’s capabilities
in their respective served markets, the combination is expected to
strengthen the combined team’s opportunity to grow their share of
the combined SAM and invest in future expansions.
- Global Scale: The combined company will have broader,
global scale enabling it to better invest, compete, and provide
innovative services to the customer base. The combined company will
have worldwide locations and facilities across the U.S., China,
Europe, Japan, South Korea, Singapore and Taiwan, including a
strong combined team worldwide. Nanometrics and Rudolph had in the
aggregate approximately $600 million in revenue and $118 million in
operating income based on 2018 results. In addition, at the end of
the first calendar quarter, the companies had in the aggregate cash
and marketable securities totaling $319 million, working capital of
$526 million and no debt.
- Strong Cash Generation: In 2017 and 2018 the companies
generated a combined $223 million in cash flows from operating
activities. The combination is expected to enhance the free cash
flow generation of the combined enterprise, resulting in a stronger
cash position to enable strategic capital deployment in order to
further increase shareholder value.
- Increased Shareholder Value: The combined company is
expected to drive long-term shareholder value through cost
synergies and revenue growth opportunities. Annual cost synergies
of at least $20 million are expected, primarily from elimination of
duplicate public company costs, elimination of redundant facility
leases, and other general administration areas. The companies
expect additional potential upside from revenue synergies through
cross-selling and software modules.
Timing and Approvals
The transaction is expected to close in the second half of 2019,
subject to the completion of customary closing conditions,
including receipt of regulatory approvals, and approval by the
stockholders of each company.
Advisors
Barclays is serving as exclusive financial advisor to
Nanometrics and Cooley LLP is serving as legal counsel. Morgan
Stanley & Co. LLC is serving as exclusive financial advisor to
Rudolph and WilmerHale LLP is serving as legal counsel.
Joint Conference Call and Webcast Information
A joint conference call and webcast will be held today at 8:30
AM ET to discuss this announcement. The conference call can be
accessed by dialing (866) 547-1509 within the U.S. and (920)
663-6208 for all other locations. The live webcast, along with the
related presentation, will be available to interested parties via
Rudolph’s IR website at investors.rudolphtech.com and Nanometrics’
IR website at investor.nanometrics.com. A replay of the webcast
will be available following the call. To access the replay, please
dial (800) 585-8367 within the U.S. or (404) 537-3406 for all other
locations. The Conference ID for the conference call and replay is
7362935.
About Nanometrics
Nanometrics is a leading provider of advanced, high-performance
process control metrology and inspection solutions used primarily
in the semiconductor manufacturing industry, as well as in the
fabrication of other solid-state devices and components in the
optoelectronic, LED and storage industries, and more recently in
the industrial, aerospace and scientific research markets.
Nanometrics’ process control solutions include automated and
integrated metrology systems as well as software and analytics that
measure and monitor key elements of device performance and yield,
such as critical dimensions, device structures, surface shape and
profile, overall topography and various thin film properties,
including three-dimensional features and film thickness, as well as
the optical, electrical and material properties of various
substrates, devices and components. Nanometrics’ solutions enable
advanced process control for device manufacturers, providing
improved device yield at reduced manufacturing cycle time,
supporting the accelerated product life cycles in the semiconductor
and other advanced markets. The company maintains its headquarters
in Milpitas, California, with sales and service offices worldwide.
Nanometrics is traded on Nasdaq Global Select Market under the
symbol NANO. Nanometrics’ website is
http://www.nanometrics.com.
About Rudolph
Rudolph Technologies, Inc. is a leader in the design,
development, manufacture and support of defect inspection,
lithography, process control metrology, and process control
software used by semiconductor and advanced packaging device
manufacturers worldwide. Rudolph delivers comprehensive solutions
throughout the fab with its families of proprietary products that
provide critical yield-enhancing information, enabling
microelectronic device manufacturers to drive down costs and time
to market of their devices. Headquartered in Wilmington,
Massachusetts, Rudolph supports its customers with a worldwide
sales and service organization. Additional information can be found
on the Company’s website at www.rudolphtech.com.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties and are made pursuant
to the safe harbor provisions of Section 27A of the Securities Act
of 1993, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. The words “believe” “continue,” “could,”
“expect,” “anticipate,” “intends,” “estimate,” “forecast,”
“project,” “should,” “may,” “will,” “would” or the negative thereof
and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions and involve known and unknown risks and
uncertainties, many of which are beyond the control of Nanometrics
Incorporated (“Nanometrics”) and Rudolph Technologies, Inc.
(“Rudolph”). Statements in this communication regarding
Nanometrics, Rudolph, or the proposed business combination between
Nanometrics and Rudolph (the “Proposed Transaction”) that are
forward-looking, including statements regarding the anticipated
benefits of the Proposed Transaction, the impact of the Proposed
Transaction on Nanometrics’ and Rudolph’s employees, business and
future financial and operating results, the amount and timing of
synergies from the Proposed Transaction, and the closing date for
the Proposed Transaction, are based on management’s estimates,
assumptions and projections, and are subject to significant
uncertainties and other factors, many of which are beyond
Nanometrics’ and Rudolph’s control. These factors and risks
include, but are not limited to, (i) weakening of global and/or
regional economic conditions, generally or specifically in the
semiconductor industry, which could decrease the demand for
Nanometrics’ and Rudolph’s products and solutions; (ii) the ability
of Nanometrics or Rudolph to meet rapid demand shifts; (iii) the
ability of Nanometrics or Rudolph to continue technological
innovation and introduce new products to meet customers’ rapidly
changing requirements; (iv) the companies’ concentrated customer
bases; (v) the ability of Nanometrics or Rudolph to identify,
effect and integrate acquisitions, joint ventures or other
transactions; (vi) the ability of Nanometrics or Rudolph to protect
and enforce intellectual property rights; (vii) operational,
political and legal risks of Nanometrics’ and Rudolph’s
international operations; (viii) the increasing complexity of
certain manufacturing processes; (ix) raw material shortages and
price increases; (x) changes in government regulations of the
countries in which Nanometrics and Rudolph operate; (xi) the
fluctuation of currency exchange rates; (xii) fluctuations in the
market price of Nanometrics’ stock; and (xiii) other risk factors
and additional information. In addition, material risks that could
cause actual results to differ from forward-looking statements
include: the inherent uncertainty associated with financial or
other projections; the ability of the companies’ to integrate their
respective businesses promptly and effectively and to achieve the
anticipated synergies and value-creation contemplated by the
proposed transaction; the companies’ ability to obtain the approval
of the Proposed Transaction by their respective stockholders and
the timing of the closing of the Proposed Transaction, including
the risk that the conditions to the transaction are not satisfied
on a timely basis or at all and the failure of the Proposed
Transaction to close for any other reason; the risk that a consent
or authorization that may be required for the Proposed Transaction
is not obtained or is obtained subject to conditions that are not
anticipated; unanticipated difficulties or expenditures relating to
the transaction, the response of business partners and retention as
a result of the announcement and pendency of the Proposed
Transaction; and the diversion of management time in connection
with the Proposed Transaction. For a more detailed discussion of
such risks and other factors, see Nanometrics’ and Rudolph’s
filings with the Securities and Exchange Commission (the “SEC”),
including under the heading “Risks Factors” in Nanometrics’ Annual
Report on Form 10-K for the fiscal year ended December 29, 2018,
filed on February 25, 2019, and Rudolph’s Annual Report on Form
10-K for the fiscal year ended December 31, 2018, filed on February
15, 2019 and in any other subsequently filed periodic reports or
other filings of the companies with the SEC, each as available on
the SEC website at www.sec.gov or
investor.nanometrics.com or
investors.rudolphtech.com. Neither
Nanometrics or Rudolph assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates, to reflect events or circumstances after the date
of this communication, or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement.
Additional Information and Where to Find It
This communication is for informational purposes only and does
not constitute an offer to buy or sell or the solicitation of an
offer to buy or sell any securities or a solicitation of any vote
or approval. This communication relates to the Proposed
Transaction. In connection with the Proposed Transaction,
Nanometrics intends to file with the SEC a registration statement
on Form S-4 that will include a joint proxy statement of
Nanometrics and Rudolph that also constitutes a prospectus of
Nanometrics. Each of Nanometrics and Rudolph also plan to file
other relevant documents with the SEC regarding the Proposed
Transaction. No offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended. Any definitive joint proxy
statement/prospectus (if and when available) will be mailed to
stockholders of Nanometrics and Rudolph. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT
STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING
THE PROPOSED TRANSACTION. Investors and security holders will be
able to obtain free copies of these documents (if and when
available) and other documents containing important information
about Nanometrics and Rudolph, once such documents are filed with
the SEC through SEC’s website at www.sec.gov. Copies of the documents filed with
the SEC by Nanometrics will be available free of charge on
Nanometrics’ website at investor.nanometrics.com or by contacting
Nanometrics’ Investor Relations Department by email at
ir@nanometrics.com or by phone at (530) 265-9899. Copies of the
documents filed with the SEC by Rudolph will be available free of
charge on Rudolph’s website at investors.rudolphtech.com or by contacting
Rudolph’s Investor Relations Department by email at
investors@rudolphtech.com or by phone at (978) 253-6200.
Participants in the Solicitation
Nanometrics, Rudolph and certain of their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the Proposed Transaction.
Information about the directors and executive officers of
Nanometrics is set forth in Nanometrics’ proxy statement for its
2019 annual meeting of stockholders, which was filed with the SEC
on April 3, 2019, and Nanometrics’ Annual Report on Form 10-K for
the fiscal year ended December 29, 2018, which was filed with the
SEC on February 25, 2019. Information about the directors and
executive officers of Rudolph is set forth in its proxy statement
for its 2019 annual meeting of stockholders, which was filed with
the SEC on April 2, 2019, and Rudolph’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2018, which was filed with
the SEC on February 15, 2019. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the Proposed
Transaction when such materials become available. Investors should
read the joint proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from Nanometrics or Rudolph
using the sources indicated above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190624005252/en/
Nanometrics Contacts Greg Swyt Vice President, Finance
(408) 545-6008 ir@nanometrics.com
Claire McAdams (530) 265-9899 claire@headgatepartners.com
Rudolph Contacts Michael Sheaffer (978) 253-6273
mike.sheaffer@rudolphtech.com
Emily Claffey/Julie Rudnick/Fiona Tessitore Sard Verbinnen &
Co (212) 687-8080
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