Japan's Tokyo Electron Ltd. has agreed to buy chip-equipment maker FSI International, Inc. (FSII) for $6.20 per share in cash, or a total of about $252.5 million, the two companies said Monday. Following the announcement, shares of FSI are gaining more than 52 percent in the regular trading session.
The purchase price represents a 53.5 percent premium to FSI's closing stock price of $4.04 on Friday, August 10, 2012.
The acquisition, which will be completed pursuant to a cash tender offer followed by a second step merger, has been unanimously approved by the boards of directors of Tokyo Electron and FSI.
FSI's board has unanimously recommended its shareholders to tender their shares into the tender offer. The transaction is expected to close in calendar year 2012.
Tokyo Electron said it is focused on improving its market position in surface preparation, which has increasingly become a critical technology in semiconductor manufacturing.
Chaska, Minnesota-based FSI is a provider of cleaning and surface preparation equipment with process capabilities that are complementary to Tokyo Electron.
Donald Mitchell, Chairman and CEO of FSI International said, "By combining the market position, scale and operational excellence of Tokyo Electron with the leading edge surface preparation solutions from FSI we can ensure that semiconductor manufacturers have access to the advanced technology they need for success at 28 nanometers and below."
Tokyo Electron, which is listed on the Tokyo Stock Exchange, said it will finance the acquisition from its existing cash resources.
In late July, Tokyo Electron reported a 66 percent fall in profit for the first quarter to 5.72 billion yen, while net sales declined 12 percent to 134.18 billion yen. The results reflected weak demand for chips used in personal computers and television sets in addition to limited recovery in the overall semiconductor and LCD panel market.
In mid-June, FSI International reported a surge in profit for the third quarter to $10 million or $0.25 per share from $4 million or $0.10 per share in the year-ago period. Sales for the quarter surged to $50.8 million from $25.6 million in the same period last year.
Goldman Sachs is serving as exclusive financial adviser to Tokyo Electron in connection with the acquisition, while Jones Day is the company's legal adviser.
For FSI, Barclays is serving as exclusive financial adviser in connection with the acquisition, while Faegre Baker Daniels LLP is its legal adviser.
In Monday's regular session, FSII is trading at $6.16, up $2.12 or 52.48 percent on a volume of 3.34 million shares.
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