8 November 2011

ATMI acquires full control of Safe Delivery Source rights

ATMI Inc of Danbury, CT, USA (which provides specialty semiconductor materials and high-purity materials handling and delivery solutions) has taken control of, and responsibility for, worldwide distribution of ATMI's proprietary Safe Delivery Source (SDS) gas storage and delivery system and related technologies from Matheson Tri-Gas Inc of Basking Ridge, NJ, USA. The two firms have signed an agreement that terminates Matheson’s license, manufacturing and distribution agreement in exchange for a $95m cash payment.

“SDS technology has delivered tremendous efficiency improvements to the ion-implantation process in the semiconductor industry,” says ATMI’s chairman, CEO & president Doug Neugold. “ATMI and Matheson worked effectively to develop the product and application to the benefit of customers worldwide. Both parties agree that now is the right time to change our relationship,” he adds.

“We are assuming responsibility for all aspects of the product, including manufacturing, distribution, logistics and — most critically — the direct sales interface with customers,” continues Neugold. “Bringing this product and future ion-implantation technologies directly to customers through ATMI’s applications and global customer support teams will allow us to deliver the best product and service to them,” he adds.

Also, Matheson’s parent firm Taiyo Nippon Sanso Corp has agreed to continue as ATMI’s distributor of the SDS product line in Japan. Matheson will continue to manufacture a portion of the SDS products for up to two years and will provide distribution and logistics services to ATMI during a transitional period.

“We are appreciative of the long history of distribution success with our partner, Matheson Tri-Gas, which was instrumental in establishing the SDS product line as the industry standard for delivery of hazardous gases into the ion-implantation marketplace,” comments Neugold.

The deal will strengthen ATMI’s base revenues, margins and earnings, reckons chief financial officer Tim Carlson. “The transaction will be highly accretive and is expected to generate $7–8m of incremental product revenues and $0.08–0.09 of incremental earnings per diluted share on a quarterly basis, beginning in the second quarter of 2012,” he notes. Over fourth-quarter 2011 and first-quarter 2012, revenue will be impacted by reversals related to previously recognized product shipments into the Matheson distribution channel, as well as inventory burn in regions where Matheson will continue to sell the product until ATMI secures the appropriate licenses and permits to fully conduct business. The expected unfavorable impact on revenues over the combined next two quarters could be up to $16m, compared to the expected post-transaction revenue level.

Also, under existing accounting rules, ATMI expects to take a one-time contract termination charge of $80–85m in the fourth quarter, subject to completion of a fair value analysis.

“By bringing the SDS products completely in-house, we are leveraging our advanced-node-focused development capabilities and product portfolio, further strengthening our interactions with customers,” Neugold adds.

Tags: ATMI Metal-organic precursor

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