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Technology Stocks : MEMC INT'L. (WFR -NYSE) The Sleeping Giant? -- Ignore unavailable to you. Want to Upgrade?

To: All Mtn Ski who wrote (4628)	10/1/2001 9:44:22 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 4697

Struggling wafer supplier MEMC to be taken over by investment group Semiconductor Business News (10/01/01 09:29 a.m. EST) ST. PETERS, Mo.-- Silicon substrate supplier MEMC Electronic Materials Inc. here today announced its major share holder has agreed to sell its 72% stake in the company to Texas Pacific Group, a private investment firm, which will attempt to revive the troubled wafer merchant with $150 million in new financing and restructured debt. MEMC--the world's third largest supplier of blank silicon wafers for chip production--had warned the industry and investors that it could run out of cash at the end of the third quarter because of depressed demand for silicon wafers and low prices in the current semiconductor recession (see Aug. 10 story). Today, the Texas Pacific Group appears to be riding to the rescue, agreeing to acquire the majority stake in MEMC from Germany's E.ON AG, an energy service provider that was formed by last year's merger of Veba and Viag. For nearly two years, MEMC's majority share holder has been looking for a buyer. Under the agreement, the Texas Pacific Group is proposing $150 million in new financing and to restructure the acquired debt of MEMC. The Fort Worth, Tex.-based investment firm hopes to substantially reduce MEMC's total indebtedness. Details about the acquisition price were not immediately available. In the past several years the Texas Pacific Group has been involved in a number of semiconductor buyouts, including Zilog and On Semiconductor. "We expect that our capital structure will be significantly strengthened and we will have substantial additional liquidity," said Klaus von Horde, chief executive officer of MEMC. "Importantly, TPG's investment allows us to continue our long-term fundamental strategies, thus ensuring that America's only significant silicon wafer supplier will continue to provide technologically advanced products to its customers around the world." In August, MEMC reported a 29% sequential decline in net sales to $156.9 million in the second quarter from $219.8 million in Q1 as demand for substrates continued to weaken in the semiconductor industry downturn. The St. Peters company posted an $88.1 million net loss in the second quarter, including $22.3 million in restructuring charges. The silicon materials supplier had reported a net loss of $17.6 million in the first-quarter this year.