Entegris Acquires ATMI For $1B

NEW YORK (The Deal) -- Entegris  (ENTG) announced Tuesday it would pay $1.15 billion for ATMI (ATMI) sending shares of the two semiconductor suppliers sharply higher.

Entegris rose $1.13, or 11%, to $11.41, while ATMI gained $6.86, or 25.5%, to $33.79.

ATMI investors will receive $34 per share, a premium of more than 26% above Monday's close. The valuation equates to $850 million when backing out ATMI's cash, which includes $170 million in expected proceeds from the pending sale of the target's life sciences business to Pall (PLL).

Entegris CEO Bertrand Loy said the purchase will help the buyer manage the growing cost and complexity of new semiconductor manufacturing processes.

ATMI provides specialty materials for semiconductor and microelectronics manufacturers. The Danbury, Conn., company generated $86 million in 2013 Ebitda, against sales of $361 million. Entegris said it projects that it will have more than $1 billion in sales following the purchase.

Stifel, Nicolaus analyst Patrick Ho observed in a Tuesday report that the deal's valuation of 2.7 times sales falls within the range of 2-to-3 times sales that is typical for the semiconductor capital sector.

ATMI disclosed that it had retained Barclays Capital to explore strategic options in November.

Pall agreed to pay $185 million for ATMI's life sciences unit in December. The sale to Entegris is conditioned upon closing the deal with Pall.

Billerica, Mass.-based Entegris said it expects to complete the purchase of ATMI in the second quarter of 2014.

Barry O'Brien and Thomas Stokes of Goldman Sachs  (GS) and a team from Ropes & Gray led by Craig Marcus, Tom Draper, Eric Elfman, Renata Ferrari and Peter Alpert advised Entegris.

Goldman is also arranging financing for Entegris.

ATMI retained Barclays bankers Ken Grahame, Paul Collins and Laurence Braham, and Weil Gotshal & Manges lawyers including Thomas Roberts, Matthew Gilroy, Mark Hoenig, Paul Wessel, John Brockland, Annemargaret Connolly and Richard Ginsburg.

Barclays and Weil also advised ATMI on the life sciences divestiture.

-- Lou Whiteman contributed to this report.

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