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Lam Research Corp., which makes chip-making equipment, agreed late Monday, Dec. 10, to buy Switzerland's SEZ Holding Ltd., a specialist in clean silicon wafer technology, for Sfr 641 million ($568 million) in cash.
Zurich-based SEZ produces a proprietary single wafer technology called Spin-Process, which forms the basis of a wide-ranging series of processes that clean and decontaminate wafers. These processes take place just before or after the wafer is etched - the segment of chip-making in which Lam is already the market leader. "This transaction positions Lam Research and SEZ to revolutionize the increasingly important area of wafer cleaning, combining the world's largest single wafer installed base with Lam's emerging clean technologies, process integration capabilities and global scale," said Lam Research president and CEO Steve Newberry in the statement announcing the deal. "Together, Lam and SEZ will create a stronger, established presence in the clean segment of the wafer fab equipment industry with the ability to deliver the broadest set of leading edge high productivity clean solutions to our customers.'' Lam Research is offering to pay Sfr 38 a share for SEZ, which represents a 39% premium to the closing share price Monday on the Swiss Exchange. However, the price is well short of the 52-week high of Sfr 45.50 achieved in March and the record high of about Sfr160 recorded during the tech boom of the late 1990s. In early October, the Swiss company lowered its 2007 sales forecast for the year to Sfr 330 million from Sfr 350 million and said its EBIT margin would fall to 2% from 5%. The company said third-quarter orders were 26% below its previous expectations due largely to price pressures in its troubled DRAM chip division. The company said once again Monday that it is expecting revenue of Sfr 330 million this year. Meanwhile, Lam's operations have been improving as the company in October reported a larger-than-expected rise in revenue in the fiscal fourth quarter, which ended Sept. 23, to $684.6 million from $604.4 million in the same period a year earlier. The company has not been reporting profits because it, like many technology companies, is reviewing its stock option practices and associated accounting issues. SEZ does have a strong balance sheet, and Fremont, Calif.-based Lam said that net of cash the deal is worth $447 million. The parties expect to close the deal by the end of March, and Lam said the deal could add slightly to earnings per share in calendar 2008. In 2006, Lam Research paid $175 million to buy the silicon fabrication assets of Eaton, Ohio-based Bullen Ultrasonics Inc., which makes a wide variety of products used in the aerospace, automotive, bioscience, medical device, semiconductor and telecommunications industries.  Deal Video
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