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Technology Stocks : Veeco Instruments-Who? -- Ignore unavailable to you. Want to Upgrade?

To: All Mtn Ski who wrote (2633)	1/12/2000 10:51:00 PM
From: B.G. Mayers	Respond to of 3069

Want to send this story to another AOL member? Click on the heart at the top of this window. Applied Materials to Buy Etec for $1.78 Bln in Stock isn't Etec a Veeco customer ??? Santa Clara, California, Jan. 12 (Bloomberg) -- Applied Materials Inc., the biggest supplier of equipment for making semiconductors, agreed to buy Etec Systems Inc. for about $1.78 billion in stock to add new tools to its product line. Applied will swap 0.649 share for each share of Etec. That values Etec at $82.46 a share, 65 percent more than its closing price of 49 7/8 today. Etec is the No. 1 maker of tools used to draw the circuit patterns that get transferred onto chips. Acquiring Etec would give Applied, which uses its broad product line to win contracts over rivals, the dominant role in a business that's becoming more important as chips get smaller. The smaller semiconductors get, the harder it is to write the patterns used to build up the multiple layers that form circuits. ``Etec is a good fit in Applied,' said Ali Irani, an analyst at CIBC World Markets with a ``strong buy' rating on both Applied and Etec shares. ``Applied is getting a unique business with no meaningful competitors.' Using lasers, Hayward, California-based Etec's products draw the circuit patterns onto glass plates known as photomasks. When light is beamed through a photomask, the patterns are transferred onto chip surfaces and later etched into circuits. Santa Clara, California-based Applied rose 6 1/4 to 127 1/16 in Nasdaq Stock Market trading before the 4 p.m. New York close. It fell as low as 122 7/8 after the acquisition was disclosed. Etec rose 7 5/16 to 49 7/8 in regular Nasdaq trading and jumped as high as 76 on the news. Applied spokesman Jeff Lettes declined to comment on whether the purchase would affect this year's earnings. Advancing Mask Making Etec's biggest customers are DuPont Photomasks Inc., Photronics Inc. and Dai Nippon Printing Co. It has 75 percent of the market for mask-writing tools, followed by No. 2 Hitachi Ltd. of Japan. Irani said he expects Applied to fold Etec's products into others it already has to make a new tool, called a module, that costs less and occupies less space. Many chipmakers prefer to buy modules because the less space in a plant, the less expensive it is to keep out the dust particles that easily can ruin a semiconductor. ``We have the opportunity to advance mask making technology,' Applied Chairman and Chief Executive Jim Morgan said in a statement. Etec would benefit by forming part of a larger organization that can absorb the swings in revenue common to a business that relies on a few large customers for sales, Irani said. Etec's revenue in fiscal 1999 fell 18 percent to $237.2 million, while Applied's sales climbed 20 percent to $4.86 billion in the year ended Oct. 31. ``With every slip in demand, there's the potential for an earnings shortfall,' Irani said. Etec shares plunged 16 percent on May 20 after the company warned that its quarterly profit wouldn't meet analysts' expectations because of weak demand. Applied has no plans to fire workers, Lettes said. Etec will continue to operate independently under President Stephen Cooper, who will become a corporate vice president at Applied, Etec spokesman David Miller said. The purchase, which is subject to shareholder approval, values Etec at $1.78 billion based on 21.57 million shares outstanding as of Dec. 1. It's expected to close in the next couple of months, Miller said. Jan/12/2000 20:07 For more stories from Bloomberg News, click here. (C) Copyright 2000 Bloomberg L.P. Any redistribution of Bloomberg content, including by framing or similar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News. The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 2000 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P.