Mattson to buy CFM, Steag chip-tool businesses for $630 million in stock

Mattson to buy CFM, Steag chip-tool businesses for $630 million in stock
FREMONT, Calif.-- In a move to greatly expand its chip-processing tool portfolio, Mattson Technology Inc. here today announced agreements to acquire the semiconductor equipment division of Steag Electronic Systems AG in Germany and CFM Technologies Inc., a U.S.-based supplier of wet-wafer cleaning systems.

The acquisitions will be made with stock valued at about $630 million, based on share prices at the close of trading on Tuesday. Once the transactions are completed early next year, Mattson Technology will be operating equipment businesses that had combined revenues of $282 million in 1999. Last year, Mattson recorded $103.5 million in revenues and a net loss of $800,000.

Preliminary estimates show the combined Mattson, CFM, and Steag equipment businesses are expected to reach revenues of about $497 million in 2000 and $733 million in 2001. The acquisitions are mutually conditioned on one another, and Mattson Technology said it expects to close the purchases simultaneously in January 2001, after government reviews and approval from shareholders at the companies.

"With these acquisitions, Mattson Technology immediately becomes a top 15 industry equipment supplier in annual sales," said Brad Mattson, chief executive officer of the Fremont company. Twelve-year-old Mattson Technology currently supplies strip, etch, deposition, rapid thermal processing (RTP) and epitaxial systems for wafer fabrication. The company has been expanding its portfolio to cover more process steps.

With systems acquired from Steag in Essen, Germany, the Fremont company expects to strengthen its position in RTP tools, which process wafers individually in precisely controlled, high-temperature chambers. Mattson Technology also will gain cleaning processes and chemical vapor deposition (CVD) tools from the German company. The acquisition agreement excludes Steag's optical storage and photomask operations. Mattson will exchange more than $450 million in stock for Steag's equipment businesses.

With the acquisition of CFM Technologies of Exton, Pa., Mattson Technology will pick up a range of wet-processing systems and technologies for stock valued at more than $155 million. Sixteen-year-old CFM has aggressively pursued a number of patent suits to protect its wet processing and wafer drying technologies in the past couple of years.

"Critical mass is the key issue in the semiconductor equipment industry," said Brad Mattson, referring to growing pressures on wafer fab tools suppliers to cover more process steps with greater resources to develop new technologies. "It used to be that the team with the best technology won, but now you need more. Our customers need to know that we can support them on a global basis, and we now give them that confidence with size."

The acquisitions received praises from some industry analysts. "The combination with Steag, which already has a No.2 position in RTP, adds to Mattson's No. 1 market position in strip," said semiconductor equipment analyst Dan Hutcheson, president of VLSI Research Inc. in San Jose. "The combination of CFM and Steag places the new company into the first tier of suppliers in the wet technology market."

Two years ago, Mattson Technology expanded its process tool offering into epi-processing systems with the acquisition of Concept Systems Design Inc. in Fremont. The $4.5 million stock swap purchase moved Mattson further into front-end-of-the-line (FEOL) processes in wafer fabs (see company story from September 1998).