Entegris, Versum in Talks to Combine -- WSJ
January 28 2019 - 2:02AM
Dow Jones News
By Dana Mattioli
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 28, 2019).
Versum Materials Inc. is in advanced talks to combine with
Entegris Inc., in a deal that would unite two chemical companies
that make critical components for the semiconductor industry.
Versum and Entegris are nearing agreement on a stock-for-stock
merger that could be announced Monday, according to people familiar
with the matter. There is, however, no guarantee the talks won't
falter before a final deal is reached.
Should they consummate a deal, it would create a company with a
current market value of nearly $8 billion that supplies products
for purifying, protecting and transporting materials used in the
manufacturing process in the semiconductor and other high-tech
industries.
Entegris, with a market value of $4.4 billion and based in
Billerica, Mass., is no stranger to dealmaking. The company was
founded in 1966 as Fluoroware. Following a merger 20 years ago, it
rebranded as Entegris and went public soon thereafter, 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.
Entegris Chief Executive Bertrand Loy is expected to be CEO of
the new company. Mr. Loy became part of Entegris in 2005 as part of
its merger with Mykrolis.
Versum, based in Tempe, Ariz., was once part of industrial-gas
maker Air Products and Chemicals Inc., before it was spun off in
2016. It had a market value of $3.5 billion as of Friday's
close.
Under the terms being discussed, Versum shareholders were
expected to own about 47.5% of the new company. Versum Chairman
Seifollah Ghasemi, who is also chairman and CEO of Air Products,
would be chairman of the new entity, the people familiar with the
matter said. 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 would add 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 02:47 ET (07:47 GMT)
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