Repost - DSA.TO (Dalsa) @ Can$ 9.10 - News Out - Fab acquisition
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News: Dalsa buys 80% interest in a fab from Zarlink (formerly Mitel) for $20m (CAn$)
DALSA reaffirms its financial guidance for 2001 issued on June 19, 2001 and guidance for 2002 issued on November 7, 2001. For 2002, pre-acquisition, DALSA's guidance was a goal of $0.60 to $0.65 per share. Post-acquisition, with debt financing, DALSA's goal for consolidated 2002 EPS is now in the range of $0.75 to $0.95.
biz.yahoo.com
DALSA to Acquire Bromont Semiconductor Wafer Foundry from Zarlink
Toronto Stock Exchange Symbol: DSA
WATERLOO, ON, Jan. 21 /CNW/ - DALSA Corporation (TSE:DSA - news) today announced a definitive agreement to acquire controlling interest of the semiconductor foundry facility of Zarlink Semiconductor Inc. (NYSE/TSE:ZL), located in Bromont, Quebec.
The acquisition is a major step in DALSA's long-term strategy of specialty semiconductor technology research, development, and manufacturing. It will strengthen DALSA's capabilities in the image sensors (Charged Coupled Device ("CCD") and Complementary Metal-Oxide-Semiconductor ("CMOS")), mixed signal, CMOS power integrated circuit, and Micro Electro-Mechanical Systems ("MEMS") including Micro Opto-Electro-Mechanical Systems ("MOEMS") semiconductor sectors, and advance DALSA to a fully integrated semiconductor company. The transaction is consistent with DALSA's existing strategy and business structure, and it will increase DALSA's exposure to the semiconductor and electronics industry.
The Bromont foundry will become "DALSA Semiconductor Inc," will be managed by DALSA Corp. and will operate as a business unit within DALSA Corp. DALSA Corp. will provide segmented financial statements for DALSA Semiconductor in financial communications once the transaction has been completed. Following the transaction, DALSA will have over 550 employees. The majority of the Company's revenues post-transaction will come from the semiconductor, electronics, and associated capital equipment markets.
Under the terms of the agreement, DALSA will pay $21.6 million in cash for an 80.1% ownership stake in DALSA Semiconductor Inc. Zarlink will also receive a 19.9% ownership position in DALSA Semiconductor Inc. and remain a significant customer of the foundry. The Board of Directors of both companies have approved the transaction. Completion of the transaction is subject to customary closing conditions and the transaction is expected to be completed in February 2002. DALSA is financing the acquisition through an existing credit facility.
The transaction provides DALSA with the following benefits:
- It is consistent with the Company's existing strategy for growth,
leveraging advanced semiconductor technologies to access large
markets with long-term growth prospects including industrial imaging,
biotechnology, automotive, and telecommunications
- It creates a fully integrated semiconductor company, giving DALSA
control of a critical supply input
- DALSA favourably differentiates itself relative to its competitors
in the digital imaging solutions industry, with superior flexibility,
control and speed as a result of captive wafer fabrication capabilities
- Acquiring advanced process technologies augments DALSA's existing wafer
fabrication process development capabilities. DALSA's scientific and
engineering know-how in advanced wafer fabrication process development
and operation has significant overlap and collaboration opportunity
with this core capability of the Bromont foundry to defend and grow
DALSA's accessible markets
- The opportunity for significant growth into new and complementary
markets, with the addition of MEMS and power semiconductors, to extend
beyond DALSA's traditional CCD and CMOS sectors
- A diversified customer base, with applications in instrumentation,
industrial controls, power management, telecommunications, imaging,
automotive, and optical networking, among others
- A developed, highly regarded wafer fabrication unit operational
infrastructure, as evidenced by the Bromont foundry's QS-9000
certification, and award in 2001 as the Motorola "Foundry of the Year"
for superior technology, service, quality and on-time delivery
- Cost reductions for DALSA's CCD and CMOS digital imaging solutions
business will accrue, as well as further cost benefits from streamlined
accounting systems, and leverage of existing sales networks across the
Company
- The transaction is expected to be accretive to DALSA's earnings in the
first year
The transaction is the latest stage in a fruitful and expanding 10 year relationship between DALSA and the Bromont foundry. The two businesses have been engaged in collaborative process development, test methodologies, and semiconductor product manufacture since 1992.
Commenting on this acquisition, DALSA's CEO Dr. Savvas Chamberlain said, "A fabless model for DALSA made sense as a smaller semiconductor producer. But, steady and rapid growth over the past decade has brought DALSA to a size where the dynamics between control and risk has shifted to favouring an integrated fabrication unit business model. The marketplace for specialized wafer processing foundry services is consolidating. This acquisition gives our company a unique opportunity to take control of the single most critical portion of our supply chain. It secures and extends our technology position from digital imaging solutions into MEMS, power semiconductors and more highly integrated CMOS products. The technology base of the Bromont foundry will expand DALSA's accessible markets, and core technologies. The outstanding process engineering team and manufacturing capabilities of the Bromont foundry, veteran management group and sales force, as well as the long-running and successful supply relationship between DALSA and the Bromont foundry, make this a tremendous step forward for DALSA."
Financial Guidance
DALSA expects the March to December 2002 revenues from the Bromont facility to be in the range of $36 to $42 million, with a corresponding accretive contribution to DALSA's EPS of $0.15 to $0.30. The large range in EPS reflects the significant earnings potential of the acquisition beyond its break-even revenue point since a substantial portion of its costs are fixed.
DALSA reaffirms its financial guidance for 2001 issued on June 19, 2001 and guidance for 2002 issued on November 7, 2001. For 2002, pre-acquisition, DALSA's guidance was a goal of $0.60 to $0.65 per share. Post-acquisition, with debt financing, DALSA's goal for consolidated 2002 EPS is now in the range of $0.75 to $0.95.
Investor Conference Call
DALSA will be hosting a conference call on Tuesday, January 22, 2002 at 8:45am EDT to discuss the present acquisition. In order to join the conference call, please call 416-640-4127 or toll free at 1-888-881-4892. The conference call will be broadcast live and recorded on the web at www.newswire.ca/webcast/pages/DALSACorporation20020122/. A taped replay of the conference call will also be made available until January 29, 2002 until 11:59 P.M. by calling 416-640-1917 or 877-289-8525 (pass code 169577(pound key)).
RBC Capital Markets acted as a financial advisor to DALSA on this transaction.
Management of the Foundry, and other Management Changes
The head of foundry operations will be Mr. Ralf Brooks, a twenty-five year management veteran in technology-based businesses. Mr. Brooks has been with DALSA since 1994, most recently in the position of Executive Vice- President and General Manager of DALSA's Vision for Machines Division, based in Waterloo, Ontario. He was a key figure in DALSA's successful integration of Silicon Mountain Design. Mr. Brooks holds a Master's degree in Medical BioPhysics from the University of Toronto and Bachelor's degree in Electrical Engineering from the University of Waterloo. He was with Spar Aerospace, NCR and AT&T prior to joining DALSA. Mr. Brooks will hold the position of President of DALSA Semiconductor, transferring to Bromont, Quebec. Mr. Brooks will report to DALSA's CEO, Dr. Savvas Chamberlain, in this new capacity.
At the same time, Dr. Jim Roberts, formerly DALSA's Vice-President and General Manager of the Vision Systems division, will assume Mr. Brooks' duties as the general manager of the Vision for Machines division. This division will be re-organised to include the company's vision systems efforts. Dr. Roberts will continue to report to DALSA's President, Brian Doody, in his new capacity as Vice-President of Vision for Machines.
About MEMS
MEMS stands for Micro Electro-Mechanical Systems, including Micro Opto- Electro-Mechanical Systems (MOEMS). These devices are created using micromachining techniques, mostly evolved from the semiconductor fabrication industry. They are typically of the same scale as silicon integrated circuits, shrinking the size of their predecessor macro devices by an order of magnitude. MEMS devices can both sense and manipulate the environment. Typical MEMS functions include pressure sensors, accelerometers, pumps, chemical sensors, light manipulators, and bio-chips. MEMS are used in a wide range of applications including medical, biotechnology, automotive, wireless telecommunications, fiber optic telecommunications, information peripherals, environmental monitoring, industrial automation, aerospace and defence. The small size and high integration of MEMS reduces the cost of the function they perform, as well as increasing reliability, compared to predecessor macro sensor and actuator designs.
The MEMS marketplace was US$4 billion in 2001 worldwide, according to Frost and Sullivan, growing at 30% per annum through 2005. The Bromont foundry currently specializes in production of automotive and fiber optic telecommunications MEMS devices. The automotive MEMS market is presently the largest of all MEMS sub-segments, at US$900 million in 2001, growing at 10% per annum. The fiber optic telecommunications MEMS device market is expected to reach US$2.5 billion in 2005, approaching this size at an annual growth rate of over 200%.
About Power
The power integrated circuit market is presently US$3 billion per year, growing at 10% per annum, according to iSupply, a power management components market research firm, and current World Semiconductor Trade Statistics global sales data. The power semiconductor market is being driven by the electronification of automobiles, higher power levels in information technology systems, and increased attention to energy efficiency across consumer, commercial and industrial systems. Power integrated circuits include such items as power Metal Oxide Semiconductor Field Effect Transistors ("MOSFETs"), rectifiers, converters, voltage regulators, pulse width modulation controllers, power switches, power factor controllers and motor controllers.
About Imaging
The high performance image capture market space for component sensors and cameras, as well as the high volume machine vision camera segment, will be US$955 million in 2002, excluding military and aerospace opportunities, according to Frost and Sullivan, Strategies Unlimited, Fuji Keizai and Vision Systems International. The long-term average compound annual growth rate of the high performance and high volume market is 12%.
On top of this, the high volume market segment for sensors, excluding those consumed in high volume machine vision cameras identified above, will be US$1.2 billion in 2002, according to Strategies Unlimited, Cahners In-Stat and Frost and Sullivan. This is growing at a long-term average annual growth rate of between 10% and 15%.
The total industrial, medical and scientific imaging capture component marketplace will be over US$2 billion in 2002, with a long term annual growth rate of 12%.
About DALSA Corporation
DALSA is an international digital imaging solutions company that designs, develops, manufactures, and markets high performance image sensors, electronic cameras, and vision systems. DALSA products are designed to replace human vision and act as high performance "electronic eyes" in machine vision. DALSA's continually expanding markets include Vision for Machines, Life Sciences, Vision Systems, and Digital Cinema. DALSA sells to Original Equipment Manufacturers (OEMs), Integrated Device Manufacturers (IDMs), end users, and to the scientific and research communities in Canada, the United States, Europe, Japan, and Asia Pacific. Based in Waterloo, Canada, with operations in Colorado Springs, Tucson, Munich, and Tokyo, DALSA is a public company listed on the Toronto Stock Exchange under the symbol "DSA".
This press release contains forward looking statements based
on assumptions, uncertainties and management's best estimates
of future events. Actual results may differ materially from
those currently anticipated. DALSA has no intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
For more information, please contact:
Dr. Savvas Chamberlain
Chief Executive Officer
DALSA Corporation
519-886-6000
519-886-0185 (Fax)
email: investor(at)dalsa.com
About Zarlink Semiconductor
Zarlink employs its formidable analog, digital and mixed-signal capabilities to offer the most compelling products for wired, wireless and optical connectivity markets and ultra low-power medical applications.
Certain statements in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties, and other factors which may cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements.
Such risks, uncertainties and assumptions include, among others, the
risks discussed in documents filed by the Company with the Securities
and Exchange Commission. Investors are encouraged to consider the
risks detailed in those filings.
Zarlink and the Zarlink Semiconductor logo are trademarks
of Zarlink Semiconductor Inc.
For further information:
Jacques Guerette Mike McGinn
Corporate Communications Investor Relations
613 270-7110 613 270-7210
jacques.guerette(at)zarlink.com Mike.mcginn(at)zarlink.com
For further information
please contact: DALSA Corporation: Dr. Savvas Chamberlain, Chief Executive Officer, DALSA Corporation, (519) 886-6000, (519) 886-0185 (Fax), email: investor@dalsa.com
Zarlink Semiconductor Inc.: Jacques Guerette, Corporate Communications, (613) 270-7110, jacques.guerette@zarlink.com
Mike McGinn, Investor Relations, (613) 270-7210, Mike.mcginn@zarlink.com |
