2 August 2010


GT Solar buys sapphire substrate maker Crystal Systems

GT Solar International Inc of Merrimack, NH, USA, which provides polysilicon production technology, multicrystalline ingot growth furnaces and related photovoltaic manufacturing services, has acquired privately held Crystal Systems Inc, a crystalline growth technology firm that manufactures large-area sapphire substrates for the LED, defense, medical and aerospace industries.

The deal consists of about $24m in cash, 5.4 million shares of GT Solar common stock, and a $21m cash earn-out (based on attaining certain financial and technical targets). Crystal Systems is profitable and expects revenue of about $16m for 2010. The firm should contribute positively to GT Solar’s operating income over the next 18 months, and is expected to be accretive on an EPS basis by fiscal year-end 2012.

“Crystal Systems’ sapphire process knowledge complements our expertise in silicon growth technologies, and we believe this combination will allow us to quickly deliver products that leapfrog sapphire crystallization technology available from other suppliers,” says GT Solar’s president & CEO Tom Gutierrez. “We expect to capitalize on the attractive opportunities we have identified in equipment, LED, and high-tech specialty markets that require high-quality, low-cost crystalline substrates,” he adds. “Crystal Systems has a rich history of innovation and we believe the combination of their technical expertise supported by our proven global operating experience and available capital resources will accelerate the adoption of new low-cost, high-quality crystalline sapphire solutions.”

Founded in 1971, Crystal Systems specializes in crystal growth technology and supplies sapphire and Ti:sapphire material. The firm leverages its proprietary and complementary crystal growth and process expertise to produce large-sized sapphire products. Development and manufacturing operations are in Salem, MA. Founder Fred Schmid, who invented the heat exchanger method (HEM) process, will be joining GT Solar in a senior technical capacity to further accelerate commercialization of the technology.

Industry analysts project that the LED market could grow at a compound annual growth rate (CAGR) of up to 40%over the next several years, driven by rapidly growing sales of products adopting the use of LEDs, such as flat-panel TVs and commercial and residential lighting (for which sapphire is the most widely used substrate).

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