Can anybody comment on the significance of this?
Isonics to Acquire Silicon-On-Insulator Wafer Business
GOLDEN, Colo.--(BUSINESS WIRE)--July 31, 2001--Isonics Corporation (NasdaqSC: ISON/ISONW) (OTCBB: ISONL/ISONZ) and (Frankfurt: IO9) a leader in the development of isotopically engineered semiconductor materials, has signed a letter of intent to acquire the silicon-on-insulator (SOI) wafer business of Vancouver, Washington-based Silicon Evolution, Inc.
In the letter of intent and subject to certain conditions, Isonics has agreed to acquire the accounts receivable, contracts, raw materials, in-process inventory, intellectual property, and fixed assets including clean rooms and wafer manufacturing equipment, in exchange for 2 million shares of Isonics common stock. Isonics will also assume certain liabilities associated with the purchased assets. Founders and key management will become Isonics employees. Additional purchase consideration of up to 1.6 million shares may be earned if future financial results meet certain criteria.
Silicon Evolution Inc. (SEI) is a wafer technology company specializing in SOI wafers for optical telecommunications, micro-electrical mechanical systems (MEMS) and digital signal processors. Their technology has been successfully applied to produce thick-film SOI wafers that have been qualified at a number of notable customers. SEI was founded by Dr. Hans Walitzki and Kurt Dichmann in 1999 as a spin-out from Wacker Siltronic, a leading silicon wafer company.
SEI has established a new manufacturing process that is less capital intensive and requires fewer steps than traditional wafer production; therefore, profitable operations can be achieved at lower production levels and with less capital investment. SEI has an extensive intellectual property portfolio as a result of the spin-out, and has filed eighteen patent applications of its own to further expand and strengthen its technology base. More information on SEI may be obtained at www.seiwafers.com.
James E. Alexander, Isonics' Chairman & CEO commented. ``Upon completion of the transaction, Isonics will have the capability to generate near-term revenues through the sales of SOI wafers, and we expect to reach profitability within 12 months. We plan to rapidly ramp natural SOI wafer sales and begin sampling Si-28 SOI wafers soon after completion of this transaction.''
Dr. Hans Walitzki, SEI founder and Chief Technical Officer noted, ``I believe that there is much synergy between SOI wafers and high thermal conductivity silicon-28. Applications such as microprocessors, digital signal processors, and micro optical electro-mechanical systems (MOEMS) are high priority targets for initial marketing. Our confidence in the viability of silicon-28 and our own ability to capture a substantial share of the SOI market is evidenced by our willingness to accept a large part of the purchase price based on our future performance. I believe the combination of SEI and Isonics will create a company which will generate great interest in the semiconductor industry.''
Mr. Alexander continued, ``The stock market is putting a high price on SOI companies - presently valuing them at 14 to 28 times annual revenues. The high valuation ratio is a result of the rapidly growing demand for SOI wafers, a fact recently noted by Gartner Dataquest in their February 2001 issue of Solid State Technology magazine. Analysts there estimated that the SOI market was $101 million in 1999, and projected SOI wafer demand to grow at a 48% CAGR between 1999 and 2005, reaching $1.068 billion. If we execute on our plan, we believe the market will recognize our new potential value and put it in line with other advanced wafer companies. Other public companies in the SOI business are; Ibis Technologies (Nasdaq: IBIS - news), an SOI wafer and equipment manufacturer which has a market capitalization of $70 million and recently reported quarterly revenue of $1.2 million; Analog Devices (NYSE: ADI - news), who paid $150 million cash in 2000 to acquire BCO, a Northern Ireland-based SOI company which had last reported quarterly revenues of $1.5 million; and SOITEC, the leading independent SOI wafer manufacturer, which is traded on the French Nouveau Marche. Its high revenue growth rate and revenues of $36 million for the year ended March 31, 2001, have resulted in a market capitalization of about $1 billion.''
About Isonics Corporation
Isonics is a world leader in isotopically engineered materials and produces isotopically pure silicon-28 chemicals and wafers for the semiconductor industry. Isonics also markets and sells stable isotopes for the health care industry such as carbon-13 for diagnostic breath tests and drug design, and oxygen-18 for positron emission tomography (PET) imaging. Stable isotopes can be thought of as ultra pure materials. For additional information visit www.isonics.com.
Except for historical information contained herein, this document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein, and which may result in the parties being unable or unwilling to complete the transaction described herein. Further, the Company operates in industries where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company's control. Other important factors that the Company believes might cause such differences are discussed in the risk factors detailed in the Company's 10-KSB for the year ended April 30, 2000, and its quarterly report on Form 10-QSB for the nine months ended January 31, 2001, both as filed with the Securities and Exchange Commission, which include the Company's cash flow difficulties, dependence on significant customers, and rapid development of technology, among other risks. In assessing forward-looking statements contained herein, readers are urged to carefully read all cautionary statements contained in the Company's filings with the Securities and Exchange Commission. |
