- Applied Materials is acquiring Kokusai Electric Corporation for $2.2 billion in cash from KKR
Today Applied Materials, Inc. (Nasdaq: AMAT) officially announced a definitive agreement in which it will acquire all outstanding shares of Kokusai Electric Corporation for $2.2 billion in cash from investment firm KKR.
Kokusai Electric is a company that is known for providing high-productivity batch processing systems and services for memory, foundry, and logic customers. These systems complement Applied’s leadership portfolio in single-wafer processing systems. And Kokusai Electric is known for having strong customer relationships, a world-class supply chain, and manufacturing capabilities in Japan and Asia.
“Kokusai Electric has a strong culture of innovation along with excellent customer relationships and serves fast-growing areas of the wafer fab equipment market,” said Applied Materials CEO and president Gary Dickerson. “By bringing Kokusai Electric’s talented team into Applied, we believe we will accelerate innovation for customers and create significant value for our shareholders.”
After the deal is closed, Kokusai Electric will operate as a business unit of Applied’s Semiconductor Products Group and continue to be based in Tokyo with technology and manufacturing centers in Toyama, Japan and Cheonan, Korea.
This acquisition is expected to be immediately accretive to Applied’s non-GAAP earnings per share at the close. And the transaction has already been approved by the Applied Materials Board of Directors. The transaction is expected to be closed within a year and is subject to regulatory approvals and other customary closing conditions.
“The opportunity to combine with Applied Materials will be very attractive for Kokusai Electric’s customers and employees alike,” added Kokusai Electric president and CEO Fumiyuki Kanai. “We are excited about the opportunity to integrate Kokusai Electric’s experienced team with Applied’s global development, customer support, and services capabilities. We believe the combination will accelerate our ability to bring exciting new technologies to customers.”
Applied Materials is expecting to finance the transaction using a combination of balance sheet cash and a term loan facility. After the close of the transaction, Applied Materials will prioritize repayment of the term loan balance while maintaining its long-term commitment to return cash to shareholders through dividends and share repurchases.
Goldman Sachs & Co. LLC served as the exclusive financial advisor for Applied Materials. And Hogan Lovells and Cleary Gottlieb Steen & Hamilton LLP served as legal counsel for Applied Materials.
