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To: Ian@SI who wrote (2163)	7/7/1999 10:19:00 PM
From: marquis103	Read Replies (1) \| Respond to of 2946

Wednesday July 7, 8:08 am Eastern Time Company Press Release Silicon Valley Group Closes Deal to Acquire Watkins-Johnson's Semiconductor Equipment Group Expanded Global Infrastructure and Dielectric Films Intellectual Property Provide Synergistic Business Benefits to Silicon Valley Group SAN JOSE, Calif.--(BUSINESS WIRE)--July 7, 1999-- Silicon Valley Group (Nasdaq:SVGI - news) announced today that it has completed the acquisition of Watkins-Johnson's (WJ) Semiconductor Equipment Group. Following this acquisition, WJ's Semiconductor Equipment Group will be consolidated with Silicon Valley Group's (SVG) Thermco Systems, creating a new subsidiary in Scotts Valley, California called Silicon Valley Group, Thermal Systems. The acquisition of certain assets, assumed liabilities and foreign subsidiaries of WJ's Semiconductor Equipment Group will be accounted under the purchase accounting method. The transaction will entail an initial payment of approximately $9.0 million and the assumption of liabilities of approximately $37 million which is based upon a December 31, 1998 Balance Sheet and will be adjusted to a final closing Balance Sheet of July 2, 1999. SVG has finalized an arrangement for rental of WJ's Scotts Valley, California facilities from a third party. The acquisition expands SVG's thin film offerings to the Chemical Vapor Deposition (CVD) and thermal markets, and gives the company access to an established customer base in Asia. ''This acquisition is part of SVG's multi-product business strategy to acquire complementary technologies and continue to invest in growth areas. The additional business will help in augmenting the size of SVG's total business. Given the cyclical nature of our industry, the timing of the acquisition suits our current growth plans very well,'' said Papken Der Torossian, Chairman and CEO of SVG. SVG intends to leverage the combined resources and technology developments to address pre-metal dielectric (PMD), inter-metal dielectric (IMD), shallow trench isolation (STI), diffusion, oxidation and annealing applications with low cost-of-ownership solutions. ''Combining these resources and technology developments will also enable us to offer customers a cost-effective migration path for SVG's future thermal products,'' said Mr. Der Torossian. ''We believe this is a strategic acquisition,'' commented Jeffrey Kowalski, president of the newly created subsidiary Silicon Valley Group, Thermal Systems. Kowalski added, ''SVG has a very large installed base of furnaces worldwide, and when you couple our current key technology developments for both 200 and 300 mm with the synergistic opportunities offered by our acquisition of WJ, both in terms of intellectual property and infrastructure, the potential benefits for our customers and our business are significant. SVG intends to use WJ's intellectual property in combination with SVG's internally developed intellectual property to develop advanced CVD and thermal processing products.'' Silicon Valley Group (Nasdaq:SVGI - news) is a leading manufacturer of automated wafer processing equipment for the worldwide semiconductor industry. The company designs, manufactures and markets technically sophisticated equipment used in the primary stages of semiconductor manufacturing. Its products include photolithography exposure tools; photoresist processing equipment; oxidation, diffusion and low-pressure chemical vapor deposition processing systems; and precision optical components and systems. For more information, visit svg.com. Important Disclaimer Statement: The matters discussed in this news release, and in particular the comments regarding combined product lines and strategic value of the Company's Chairman and CEO as well as those of the President of Silicon Valley Group's Thermco Systems include forward looking statements that involve substantial risks and uncertainties, including but not limited to deriving benefits from product synergies, efficiencies of combining the businesses, expansion of customer base, economic conditions, industry conditions, trade environment, and other risks discussed more fully in filings by the Company with the Securities and Exchange Commission. Reference is made to the Company's most recent Form's 10K and 10Q, which detail such risks factors. --------------------------------------------------------------------------------