Brooks will acquire PRI to create fab automation giant

CHELMSFORD, Mass. -- Brooks Automation Inc. today announced it will acquire PRI Automation Inc. for stock valued at $380 million in a move to create a larger supplier of fab software, materials handling systems, and other products for increased productivity in wafer fabs.

The new company will be called Brooks-PRI Automation Inc., headquartered in Chelmsford.

The move to combine Brooks and PRI comes at a time when both fab automation suppliers are struggling with the severe downturn in semiconductor capital spending and delays in 300-mm wafer plants, which are expected to require more software and systems to manage tools and processes. In the past year, both companies have been expanding into overlapping areas of automation, such as electronic business or e-diagnostics over Internet links.

"Now is the time to consolidate, to position ourselves to achieve higher gross margins and growth in the next upturn," said Robert J. Therrien, president and CEO of Brooks. "We are also looking at the strong trend toward advances and integration. The industry wants to do business with fewer suppliers. They want more complete, more capable and more integrated solutions," he said during a conference call with analysts after announcing the transaction today.

"Rather than continuing to invest in each other's space of fab automation going forward, we thought this was the time for a merger and in the down-cycles sometimes you find more time to focus on processes, restructuring and integration than you can in the up-cycle, when everyone is running so fast just to satisfy the customer," Therrien said.

Chelmsford-based Brooks and PRI in Billerica, Mass., said the acquisition will create a combined supplier of automation systems, software, and services with annual sales of $700 million, based on a fiscal year ended Sept. 30.

Under a purchase agreement, Brooks will trade 0.52 share of its stock for each share of PRI Automation. The acquisition has been approved by boards of directors at both companies and is expected to be completed in the first quarter of 2002. Brooks shareholders will own 61% of the merged company, while PRI stockholders will hold 39%.

Brooks said the transaction is expected to be accretive to its earnings in fiscal 2003 (which begins Sept. 30, 2002)--the first full fiscal year following completion of the acquisition and merger of units. Brooks said it expects to save more than $20 million in "operational synergies" with the combination of the businesses.

Therrien will remain as president and chief executive officer of the combined companies. Ellen B. Richstone, chief financial officer of Brooks, will be CFO of the merged company. PRI president and chief executive officer Mitchell G. Tyson and one other company director will sit on the new board of directors at Brooks-PRI Automation along with all five of Brooks' current directors.

"The semiconductor fab of the future will need to be highly flexible, efficient and intelligent. It must be fully automated to optimise the flow of material and information," Tyson said "No company will be better able to capture this market opportunity, help drive the transition to 300-mm, and build shareholder value."