Highly Complementary and Diversified Portfolio – the Most
Comprehensive in the Industry
Poised to Take Advantage of Industry Technology Roadmap Through World
Class Technological Capabilities
Results in Financial Strength and Flexibility with Pro Forma Sales of
Approximately $3 Billion and Adjusted EBITDA of Approximately $1 Billion
for Calendar Year 2018
Expected to Generate More Than $75 Million of Annual Cost Synergies
within 12 Months Post Close
Entegris and Versum Materials Separately Announce Preliminary
Earnings Results; Companies to Host Conference Call Today at 8:00 a.m.
ET (6:00 a.m. MT)
BILLERICA, Mass. & TEMPE, Ariz.--(BUSINESS WIRE)--Jan. 28, 2019--
Entegris, Inc. (NASDAQ:ENTG), a leader in specialty chemicals and
advanced materials solutions for the microelectronics industry, and
Versum Materials, Inc. (NYSE:VSM), a leading specialty materials
supplier to the semiconductor industry, today announced that they have
agreed to combine in a merger of equals. The combined company will be a
premier specialty materials company for the semiconductor and other
high-tech industries.
Under the terms of the agreement, which was unanimously approved by the
Boards of Directors of both companies, Versum Materials stockholders
will receive 1.120 shares of Entegris for each existing Versum Materials
share. Upon completion of the merger, Entegris stockholders will own
52.5 percent and Versum Materials stockholders will own 47.5 percent of
the combined company1. The combined company will have a pro
forma enterprise value of approximately $9 billion, based on the closing
prices of Entegris and Versum Materials on January 25, 2019, and
approximately $3 billion in revenue and approximately $1 billion in
Adjusted EBITDA on a pro forma basis for calendar year 20182.
The combined company will retain the Entegris name and will be
headquartered in Billerica, Massachusetts, and will maintain a strong
operational presence in Tempe, Arizona.
Upon closing of the transaction, Entegris CEO Bertrand Loy will serve as
Chief Executive Officer, Entegris CFO Greg Graves will serve as Chief
Financial Officer, and Versum Materials General Counsel Michael Valente
will serve as General Counsel of the combined company, supported by a
highly experienced and proven leadership team that reflects the
strengths and capabilities of both companies.
The combined company’s Board of Directors will have nine members,
consisting of four directors from the existing Versum Materials board,
including Seifi Ghasemi, Chairman of the Versum Materials Board, who
will serve as Chairman of the Board of the combined company, and five
directors from the existing Entegris Board, including Bertrand Loy.
Entegris President and Chief Executive Officer, Bertrand Loy said, “We
are excited to combine with Versum Materials to create a premier
specialty materials company for the semiconductor and other high-tech
industries. The combined company will be ideally positioned to more
effectively help our customers achieve higher yields and new levels of
performance and reliability, and together, we will be well positioned to
take advantage of long-term secular semiconductor growth, and to tackle
new industry process challenges. I have great respect for the Versum
Materials team and look forward to joining forces as we embark on this
next chapter and create new value for our stockholders, employees and
customers.”
Versum Materials President and Chief Executive Officer, Guillermo Novo
said, “We could not ask for a better partner in Entegris. This merger
will create greater benefits and growth opportunities than either
company could have achieved on its own. It dramatically accelerates our
goal of portfolio diversification – creating an end-to-end materials
solutions provider across the entire semiconductor manufacturing
process. With enhanced global scale and world class technical expertise,
we’ll be poised to drive further innovation and support investments
across our technology, infrastructure, and additional capabilities –
enabling us both to better serve our customers and provide expanded
opportunities for our employees.”
Compelling Strategic and Financial Benefits of the Merger
- Enhanced product breadth and depth: Entegris and Versum
Materials have highly complementary portfolios that combined will
bring customers enhanced technical capabilities. This merger will
create the world’s first comprehensive and effective end-to-end
materials solutions provider across the entire semiconductor
manufacturing process. The combined company is expected to have a full
suite of diversified product offerings including Advanced Materials,
Specialty Gases, Microcontamination Control, Advanced Materials
Handling, and Delivery Systems and Services.
- World class technology: The combined company’s world class
technology and R&D capabilities will better enable it to:
-
Address customers’ evolving needs for new materials as device
architectures become more complex;
-
Capitalize on the increasing demand for purity and help drive
improved yield; and
-
Accelerate the development and time to market of new technologies
that align with the industry technology roadmap.
- Global scale and operational excellence: A much broader, global
scale will enable the combined company to reach additional customer
touch points, and have increased relevance in key geographies. By
combining its extensive global manufacturing network, the company will
be able to improve delivery times and drive new levels of operational
efficiencies and excellence.
- Increased financial strength and flexibility: The combined
company will have approximately $3 billion in revenue and
approximately $1 billion in Adjusted EBITDA on a pro forma basis for
calendar year 20183. It will be well capitalized with a
strong balance sheet and a pro forma net leverage ratio of 1.1x4.
In addition, it will have flexibility to invest, make acquisitions,
and return capital to stockholders, while enjoying greater earnings
stability and margin growth potential.
- Significant stockholder value creation: The combination is
expected to generate more than $75 million of annual cost synergies in
manufacturing, logistics, procurement and SG&A rationalization within
12 months post close. In addition, the combined company is expected to
realize significant revenue growth synergies from cross-selling
opportunities, with further potential upside from capex and revenue
synergies.
Timing and Approvals
The transaction is expected to close in the second half of 2019, subject
to the satisfaction of customary closing conditions, including receipt
of U.S. and international regulatory approvals, and approval by the
stockholders of each company.
Advisors
Morgan Stanley & Co. LLC is serving as exclusive financial advisor to
Entegris and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
Lazard is serving as exclusive financial advisor to Versum Materials and
Simpson Thacher & Bartlett LLP is serving as legal counsel.
Joint Conference Call and Webcast Information
A joint conference call and webcast will be held today at 8:00 a.m. ET
(6:00 a.m. MT) to discuss this announcement. The conference call can be
accessed by dialing (866) 610-1072 within the U.S. and (973) 935-2840
for all other locations. The live webcast, along with the related
presentation, will be available to interested parties via Entegris’ IR
website at http://investor.entegris.com/investor-relations
and Versum Materials’ IR website at http://investors.versummaterials.com,
as well as through the joint transaction website at www.entegris-versummaterials.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 4264678.
Entegris Fourth Quarter and Full Year 2018 Preliminary Earnings
Results and Versum Materials First Quarter 2019 Preliminary Earnings
Results
In separate releases issued today, Entegris announced its preliminary
financial results for the fourth quarter and full year of 2018 and
Versum Materials announced its preliminary financial results for the
first quarter of 2019.
For additional information on the transaction, please visit the joint
transaction website at www.entegris-versummaterials.com.
About Entegris
Entegris is a leader in specialty chemicals and advanced materials
solutions for the microelectronics industry and other high-tech
industries. Entegris is ISO 9001 certified and has manufacturing,
customer service and/or research facilities in the United States, China,
France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and
Taiwan. Additional information can be found at www.entegris.com.
About Versum Materials
Versum Materials, Inc. (NYSE:VSM) is a leading global specialty
materials company providing high-purity chemicals and gases, delivery
systems, services and materials expertise to meet the evolving needs of
the global semiconductor and display industries. Derived from the Latin
word for "toward," the name "Versum" communicates the company's deep
commitment to helping customers move toward the future by collaborating,
innovating and creating cutting-edge solutions.
A global leader in technology, quality, safety and reliability, Versum
Materials is one of the world's leading suppliers of next-generation CMP
slurries, ultra-thin dielectric and metal film precursors, formulated
cleans and etching products, and delivery equipment that has
revolutionized the semiconductor industry. Versum Materials reported
fiscal year 2018 annual sales of about U.S. $1.4 billion, has
approximately 2,300 employees and operates 14 major facilities in Asia
and the North America. It is headquartered in Tempe, Arizona. Versum
Materials had operated for more than three decades as a division of Air
Products and Chemicals, Inc. (NYSE:APD).
For additional information, please visit http://www.versummaterials.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. Where a forward-looking statement expresses or implies an
expectation or belief as to future events or results, such expectation
or belief is expressed in good faith and believed to have a reasonable
basis. 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 Entegris’ and Versum Materials’
control. Statements in this communication regarding Entegris, Versum
Materials and the combined company that are forward-looking, including
projections as to the anticipated benefits of the proposed transaction,
the impact of the proposed transaction on Entegris’ and Versum
Materials’ 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 Entegris’ and
Versum Materials’ 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 Entegris’ and Versum Materials’ products and
solutions; (ii) the ability to meet rapid demand shifts; (iii) the
ability to continue technological innovation and introduce new products
to meet customers’ rapidly changing requirements; (iv) the concentrated
customer base; (v) the ability to identify, effect and integrate
acquisitions, joint ventures or other transactions; (vi) the ability to
protect and enforce intellectual property rights; (vii) operational,
political and legal risks of Entegris’ and Versum Materials’
international operations; (viii) Entegris’ dependence on sole source and
limited source suppliers; (ix) the increasing complexity of certain
manufacturing processes; (x) raw material shortages and price increases;
(xi) changes in government regulations of the countries in which
Entegris and Versum Materials operate; (xii) the fluctuation of currency
exchange rates; (xiii) fluctuations in the market price of Entegris’
stock; (xiv) the level of, and obligations associated with, Entegris’
and Versum Materials’ indebtedness; and (xv) 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
prompt and effective integration of Entegris’ businesses and the ability
to achieve the anticipated synergies and value-creation contemplated by
the proposed transaction; the risk associated with Entegris’ and Versum
Materials’ ability to obtain the approval of the proposed transaction by
their shareholders required to consummate the proposed transaction 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 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 transaction; and the diversion of management time on
transaction-related issues. For a more detailed discussion of such risks
and other factors, see Entegris’ and Versum Materials’ filings with the
Securities and Exchange Commission, including under the heading “Risks
Factors” in Item 1A of Entegris’ Annual Report on Form 10-K for the
fiscal year ended December 31, 2017, filed on February 15, 2018, and
Versum Materials’ Annual Report on Form 10-K for the fiscal year ended
September 30, 2018, filed on November 21, 2018 and in other periodic
filings, available on the SEC website or www.entegris.com
or www.versummaterials.com.
Entegris and Versum Materials’ assume 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 about the Merger and Where to Find It
This communication 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 a proposed
business combination between Entegris and Versum Materials. In
connection with the proposed transaction, Entegris intends to file with
the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 that will include a joint proxy statement of
Entegris and Versum Materials that also constitutes a prospectus of
Entegris. Each of Entegris and Versum Materials 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 Entegris and
Versum Materials. 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 ABOUT 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 Entegris and Versum Materials, once such documents are filed with
the SEC through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Entegris will be available
free of charge on Entegris’ website at http://www.entegris.com
or by contacting Entegris’ Investor Relations Department by email at irelations@entegris.com
or by phone at 978-436-6500. Copies of the documents filed with the SEC
by Versum Materials will be available free of charge on Versum
Materials’ website at investors.versummaterials.com
or by phone at 484-275-5907.
Participants in the Solicitation
Entegris, Versum Materials 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 Entegris is set forth in Entegris’
proxy statement for its 2018 annual meeting of shareholders, which was
filed with the SEC on March 28, 2018, and Entegris’ Annual Report on
Form 10-K for the fiscal year ended December 31, 2017, which was filed
with the SEC on February 15, 2018. Information about the directors and
executive officers of Versum Materials is set forth in its proxy
statement for its 2019 annual meeting of shareholders, which was filed
with the SEC on December 20, 2018, and Versum Materials’ Annual Report
on Form 10-K for the fiscal year ended September 30, 2018, which was
filed with the SEC on November 21, 2018. 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 Entegris or Versum Materials using the sources
indicated above.
1 Ownership based on fully diluted shares outstanding
including exercisable options only.
2 Revenue and Adjusted EBITDA LTM as of December 31, 2018;
Adjusted EBITDA inclusive of expected synergies of $75 million.
3 Revenue and Adjusted EBITDA LTM as of December 31, 2018;
Adjusted EBITDA inclusive of expected synergies of $75 million.
4 Net debt as of December 31, 2018 and EBITDA LTM as of
December 31, 2018; EBITDA inclusive of expected synergies.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190128005253/en/
Source: Entegris, Inc.
Entegris Contacts
Bill Seymour
VP of Investor Relations
952-556-1844
bill.seymour@entegris.com
Or
Michael
Freitag / Kelly Sullivan
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Versum
Materials Contacts
Soohwan Kim, CFA
Head of Investor
Relations
602-282-0957
Soohwan.Kim@versummaterials.com
Tiffany
Elle
Global Communications
480-282-6475
Tiffany.Elle@versummaterials.com
Or
Meghan
Gavigan / Emily Claffey / Julie Rudnick
Sard Verbinnen & Co
212-687-8080
