*AV*--A further explanation on the ASYT acquisition of Hine Designs
DLJ
RATING: Buy Change: None 12-Mo Target: $27
VIEWPOINT
We have a buy recommendation and a one year price target of $27 on Asyst Technologies based on 30 times our FY2000 EPS estimate of $1.40
This morning, Asyst Technologies annouced the acquisition of Hine Design, a leading supplier of wafer-handling robots for semiconductor process tools. This acquisition will expand Asyst's product portfolio for semiconductor factory automation The transaction is accounted for as a purchase accounting transaction for $12 million in cash and $12 million in debt and will likely be concluded over the next 35-40 days (2Q'99) . This acquisition makes Asyst the only complete solution supplier. The acquisition will be neutral to Asyst near-term and accretive thereafter. Also, the company will be taking a charge for in-process R&D and will have some modest good-will amortization.
COMPANY DESCRIPTION - ASYT is a supplier of mini-environment systems used in cleanrooms for semiconductor manufacturing. These systems control contamination levels on in-process wafers by isolating processing equipment and wafers in ultraclean mini-environments. The company's Asyst-SMIF(Standard Mechanical Interface) System combines state-of-the-art minienvironments with advanced robotics to create ultraclean processing environments that are both comprehensive and flexible. The SMART-Traveler System (STS) works in tandem with SMIF to eliminate misprocessing. Both Asyst-SMIF and its companion STS products are necessary to seamless factory automation. The company's subsidiary, Asyst Software, is dedicated to the development of software products for equipment communications and automated material handling, identification and tracking and their newest subsidiary Asyst KK in Japan is dedicated to serving the Japanese marketplace.
IMPORTANT POINTS
1. This morning, Asyst Technologies annouced the acquisition of Hine
Design, a leading supplier of wafer-handling robots for semiconductor
process tools. This acquisition will expand Asyst's product portfolio for semiconductor factory automation
2. The transaction will be structured as a purchase of stock for about
$12 million in cash and the assumption of $12 million in debt liabilities. When the transaction is completed, Hine Design will become a wholly owned subsidiary of Asyst. The transaction is expected to be fina1ized in the second quarter FY1999,
3. Hine Design is a designer and manufacturer of precision substrate
handling equipment for vacuum, atmospheric, and corrosive environments. Hines robotic arms are versatile meeting a wide variety of needs for applications including extended motions, double end effectors, wafer mapping, and precise wafer alignment for semiconductor manufacturing. Currently, the company's products are "designed-in" to over 20 new 200mm and 300mm semiconductor equipment tools.
4. Hine Design has over a dozen major customers - all of them leaders in the semiconductor capital equipment industry such as Novellus, Integrated Process Equipment, Lam Research, Gasonics etc. These companies in the United States and Japan, are among the leaders in CMP, etch, metrology, CVD and ion implant
5. Larger wafers and shrinking feature size are forcing semiconductor
manufacturers to adopt new operations such as CMP and additional metrology steps - processes which also benefit from automation.
6. More and more fabs are going to SMIF. Asyst has more than an 85%
worldwide market share. Asyst should benefit substantially from the move to 300mm because 300mm carries a higher percentage of automation.
7. The company plans to announce first quarter (FY1999 JUNE) results on July 22, 1998 after market close. We are estimating $0.23 with revenues of about $33.9 million.
DETAILS
Asyst announced that it has agreed to acquire Hine Design Inc., a leading supplier of wafer-handling robots for semiconductor process tools. This acquisition will expand Asyst's product portfolio for semiconductor factory automation. Founded in 1983, Hine Design Inc. is a privately held company with headquarters (an approximate 45,000 ft. facility) in Sunnyvale specializing in the design and manufacture of wafer and flat panel display material handling solutions.
Hine Design is an ISO9OOl certified company and has received Lam Research Corp.'s Supplier of the Year award for five consecutive years and GaSonics International's first Outstanding Supplier award. The company has about 100 employees with revenues of roughly $12 million annually.
Hine Designs product portfolio includes wafer handling & flat panel Systems as well as id readers: Robotic arms and advanced 1 random access elevators for vacuum and atmospheric applications. (Three to eight inch waters and LCD displays) - Hine Sight wafer ID reading (soft and hard mark) and tracking systems for sorters, probers, cluster tools and stand alone cassette applications. Read rates exceeding 99% with the only "in cassette" reader on the market
The acquisition of Hine Design is the latest development in Asyst's
strategic vision to provide customers a more complete tool automation
solution. Hine Design provides customized robotic wafer-handling
solutions to the OEM market. The company has the capability to meet
requirements for harsh environment applications such as CMP, copper
processing and other tools.
The acquisition augments the hardware and software offerings that Asyst provides by adding wafer handling robotics to Asyst's portfolio of minienvironment, isolation technology and software products.
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