NEWS RELEASE ALERT!
PMT Completes Acquisition Of Electrotech
CHATSWORTH, Calif.--Plasma & Materials Technologies, Inc. (NASDAQ: PMAT)(PMT), a broad line supplier of advanced etch and deposition equipment used to manufacture semiconductors, today announced that the Company has completed the acquisition of Electrotech Limited and Electrotech Equipments Limited (collectively Electrotech), a supplier of advanced semiconductor deposition equipment headquartered in the United Kingdom. PMT purchased all of Electrotech's outstanding capital stock for an aggregate of $75,000,000 cash and 5,600,000 shares of newly issued PMT Common Stock.
"We are very excited to complete the acquisition of Electrotech because it is a big step towards PMT's goal of building a new, global, semiconductor equipment manufacturer," said Greg Campbell, PMT's CEO. "PMT now possesses proprietary, leading edge technology for etch, physical vapor deposition (PVD), and chemical vapor deposition (CVD) applications. In addition, the acquisition expands PMT's sales and service organization, and customers will immediately benefit from the combined companies' increased presence throughout the U.S., Europe, and Asia."
To help finance the cash portion of the acquisition, on October 7, 1996 PMT completed the sale of $86,250,000 principal amount of 7 - 1/8% Convertible Subordinated Notes Due 2001. The Notes are convertible into Common Stock at a conversion price of $15.635 per share. In addition, PMT has secured a $35 million working capital line of credit subject to borrowing base limitations, and obtained commitments for an additional funding of up to $6,250,000 of subordinated indebtedness.
PMT's Management Structure
Greg Campbell will continue to be CEO of PMT and Nigel Wheeler, who was Electrotech's CEO, is now president, COO, and a board member of PMT. John La Valle will continue to serve as the Company's vice president and CFO, and Harvey Frye will continue to be vice president responsible for the global sales and service organization. Jim Marshall, executive vice president and general manager, will continue to be responsible for PMT's etch division operations. A general manager for the company's deposition division will be named at a future date. Until such time, Nigel Wheeler will be responsible for the deposition division.
Chris Dobson, Electrotech's founder and chairman, is PMT's Chairman of the Board. John Rollwagen, previously PMT's Chairman, will remain a member of the board of directors.
PMT's High Density Plasma Etch Technology
Since the second quarter of 1995, PMT has been shipping an advanced plasma etch manufacturing system that utilizes the company's proprietary MORI plasma source. Unlike competing high density plasma (HDP) sources, the MORI source is a resonant induction source which is remote from the wafer and launches a radio frequency wave into the plasma. This unique method of plasma generation produces a high density of electrons and ions while allowing a reduction in the process pressure. In addition, the MORI source enables the widest process window, due to its unique ability to provide precise, hands-on control of plasma uniformity -- fully independent of density and pressure. For semiconductor manufacturers, the end results are faster etch rates and lower cost of ownership within the industry's most flexible manufacturing system. Customers in Japan, U.S., and Korea are using the Pinnacle 8000R for developing polysilicon, metal, and oxide etch applications at .35 um, .25 um, and .18 um geometries. Recently, PMT shipped its first production systems to Hyundai Electronics.
PMT's New Deposition Technologies
With the addition of Electrotech's leading edge deposition technologies under development, PMT will possess one of the broadest and most advanced product offerings in the semiconductor manufacturing industry.
PMT expects to be able to offer an advanced technique for metal deposition through a PVD system with a proprietary Forcefill technology that abates the need of tungsten CVD for plug applications. Although tungsten plugs result in slower devices because of resistivity problems, the expensive and "dirty" tungsten CVD scheme was reluctantly adopted by leading edge device manufacturers because of the increasing difficulty of filling smaller and deeper metal contact holes. Management believes Forcefill will allow semiconductor manufacturers to return to aluminum interconnects that enable higher performance devices and, at the same time, significantly lower manufacturing costs by replacing three to four machines needed for tungsten CVD with one Forcefill PVD system.
The second leading edge deposition technology that PMT expects to be able to offer is an oxide CVD system with a proprietary Flowfill technology for planarized intermetal dielectric deposition (IMD). Alternative technologies for depositing oxides are spin on glass (SOG), and HDP CVD with chemical mechanical polishing (CMP). SOG is a slow, multistep process that can lead to a number of added particles that can decrease yield and, therefore, increase costs. Existing HDP CVD produces higher quality oxide films and gap-fills a wafer within one system, but the rough spots on the wafer must be planarized using a CMP process in a second system. Management believes the quality of Flowfill's oxide can be better than that of SOG and, because it can both planarize and gap-fill simultaneously, Flowfill eliminates the need for CMP on some devices.
The result is a decrease in equipment cost and manufacturing time, while increasing yields.
Global Presence and Critical Mass
The addition of Electrotech's sales and support organization will substantially increase PMT's local support presence throughout Europe and the U.S. Combined with PMT's existing presence in Japan and Korea, the new sales and support organization will allow PMT to support semiconductor manufacturers on a global basis. Manufacturing of PMT's etch products will remain in Chatsworth, California and the new deposition technologies will continue to be developed and manufactured in Newport, Wales.
On an unaudited pro forma basis, the combined revenue for PMT and Electrotech would have been $66,143,000 for the six month period ended June 30, 1996. Pro forma combined operating income for the six months period would have been $10,925,000, after giving effect to $2,909,000 of expenses related to the amortization of intangibles to be acquired as part of the acquisition. Pro forma combined earnings would have been $4,876,000 or $0.33 per share.
Safe Harbor Statement: Except for historical information contained herein, the matters set forth in this news release are forward looking statements that involve a number of risks and uncertainties. In addition to factors discussed above, the factors that could cause actual results to differ materially include the following: product demand and market acceptance, the timing and success of new product introductions, business issues and growth within the semiconductor manufacturing industry, competitive factors such as rival etch and deposition technologies, and availability of key supplier components at reasonable prices. For a description of risks attendant to PMT and the semiconductor manufacturing industry, please see the Company's SEC filings, specifically the Proxy Statement dated September 11, 1996 and its supplement dated October 1, 1996. These documents contain detailed information regarding the acquisition described above.
PMT develops, manufactures, and markets a broad line of advanced processing systems for semiconductor manufacturing. These systems are used for etch, physical vapor deposition (PVD) and chemical vapor deposition (CVD) applications, and are sold to customers worldwide. PMT sells its equipment through a combination of a direct sales force and a worldwide network of distributors. The Company maintains wholly-owned subsidiaries in Germany, France, and Korea. Manufacturing is conducted in Newport, Wales and Chatsworth, California. The Company's corporate headquarters are located in Chatsworth, north of Los Angeles.
CONTACT: Plasma & Materials Technologies
Frederick Reynolds, 818/886-8000, ext. 155
freynolds@pmat.com
pmat.com
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