Applied Materials

(AMAT) - Get Report

moved deeper into the solar energy market Tuesday with its $475 million acquisition of

HCT Shaping Systems


The all-cash deal fleshes out Applied Material's portfolio of equipment for manufacturing photovoltaic solar cell wafers, supplementing its traditional business providing semiconductor and flat-panel display manufacturing tools.

In a conference call with analysts after Tuesday's market close, Applied Materials executives said the acquisition adds to the momentum the company is experiencing in the solar energy market.

HCT, a privately held Swiss company, had net sales of roughly $124 million in the last fiscal year and has about 200 employees on its payroll, according to Applied Materials.

HCT makes tools for slicing polysilicon into thin wafers the width of two human hairs.

"Reflecting the strong operating margins in this business, we expect the transition to be cash accretive in year one and GAAP accretive in year two," said CFO George Davis.

Applied Materials formally established a solar equipment division in September, after its acquisition of

Applied Films

. In May, the company raised its initial estimate for solar-based revenue this year from $200 million to $400 million.

Analysts polled by Thomson Financial expect Applied Materials to record $9.8 billion in total sales this year, with EPS of $1.22.

Solar power equipment is a key source of growth for Applied Materials, said CEO Mike Splinter. And with HCT, Applied Materials expects to bolster that growth by driving down the cost per wafer by as much as 50%.

"We believe we can take solar wafer manufacturing to the next level in productivity," said Splinter.

Shares of Applied Materials closed the regular session down 15 cents and were off an additional 8 cents at $19.65 in extended trading.