Novellus exec says valuation holds up Lam deal
Friday August 22, 3:03 pm ET
By Daniel Sorid
SAN JOSE, Calif., Aug 22 (Reuters) - Microchip-making tool maker Novellus Systems Inc. (NasdaqNM:NVLS - News) has its sights set on acquisitions, but at least one potential deal -- with Lam Research Corp. (NasdaqNM:LRCX - News) -- has gotten hung up on disagreements about valuation and how to combine management, Novellus President Peter Hanley said in an interview.
"It has fit for years," Hanley told Reuters in an interview at the company's headquarters in San Jose, California, on Thursday, referring to a deal with Lam. "Clearly, we view ourselves as one of the companies that could be a consolidator in this industry."
He said a combination of disagreements on valuation and a combined company's leadership structure has made such a deal, long expected by analysts, a challenge to complete.
"If you can't agree on the valuation, it's hard to do," he said.
Novellus and Lam build complementary chip-building equipment, with that of Novellus depositing materials on silicon wafers and Lam's etching materials off. They also share a rivalry with Applied Materials Inc. (NasdaqNM:AMAT - News), the dominant semiconductor equipment producer.
Hanley also said a partnership has become more difficult because Lam and Novellus have begun to compete with one another in the market for polishing equipment, known as CMP.
"Both of us have a CMP business," he said. "That strains the relationship a little bit, but it doesn't make it hostile."
Novellus has made a few major acquisitions in recent years, including the purchase of SpeedFam-IPEC Inc. in 2002 and Gasonics International Corp. in 2001. |
