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Entegris, Inc.

Poco Graphite Acquisition Call

July 15, 2008 11:30 a.m. ET

Executives

Steve Cantor – VP of Corporate Relations

Gideon Argov – President and CEO

Gregory Graves – Senior VP and CFO

John Goodman – Senior VP and CTO

Analysts

Brett Hodess – Merrill Lynch

Analyst for Timothy Arcuri – Citigroup

Dan Leonard – First Analysis Corporation

Operator

Good day, everyone, and welcome to today’s Entegris to Acquire Poco Graphite conference call. (Operator Instructions) At this time for opening remarks and introductions, I would like to turn the call over to Steve Cantor, VP of Corporate Relations.

Steve Cantor

Yesterday we announced a definitive agreement to acquire Poco Graphite. A copy of the press release and a PowerPoint presentation with additional information is available on our website, www.entegris.com.

I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, and our actual results may differ materially. These risks and uncertainties are outlined in detail in this morning’s press or yesterday’s press release and in our most recent 10-K report as well as in our other reports and filings with the SEC. We encourage you to carefully read those reports and filings.

On the call today are Gideon Argov, President and CEO; Greg Graves, Chief Financial Officer; and John Goodman, CTO. Gideon will now begin the call.

Gideon Argov

I’m very pleased to announce that we’ve reached an agreement to acquire privately held Poco Graphite. We believe the addition of POCO will provide some important benefits to Entegris. It’s a strong, profitable growing business with a proven track record and a well-established position in its market. It adds another consumable product line to our mix. It builds on our materials science capabilities, and it adds to our base in the semiconductor market while adding a growth factor to the diversifier business.

POCO represents the next leg of our strategy to build a materials-based business following the acquisition of a specialty coating’s business in August of 2007. POCO is the leading provider of specialized graphite and silicon carbide products in the semiconductor market, as well as other high-performance industries. Annualized sales are approximately $65 million. The company has grown steadily over the past five years. It addresses a market that’s more than 90% recurring and is expected to grow by more than 10% annually over the long-term.

POCO’s semiconductor-related business represents approximately 40% of its total revenues and is driven by the move of manufacturers away from using materials such as metal, quartz, and silicone in favor of graphite and silicon carbide, which offer better electrical, thermal, and purity properties.

POCO’s products are used in etch, ion implant, as well as CVD applications and tools. For etched applications, POCO provides consumable components to deliver and confine process gases and plasma. For ion implant applications, POCO’s products are used to define as well as control the ion beam; and in CVD, POCO’s graphite-based chamber components such as carriers limit particles and contamination.

In addition, POCO provides Entegris with attractive growth factors outside of the semiconductor market. About a third of POCO sales are to be electrical discharge machining, or EDM, market where it supplies graphite electrodes used in a wide range of precision machining applications. POCO’s perhaps the best-known and best respected name in this market which is being driven by better economics of graphite over other materials such as copper and increasing demand in Asia.

The balance of POCO’s revenues, about 30% of total sales, addresses niche applications for specialty graphite and silicon carbide industrial, solar energy, fuel cell, medical markets, as well as applications in the glass container market. We see significant opportunities to grow these niche applications given the attracted cost and performance qualities in graphite over other materials such as beryllium and silicone. As such, they’re growing applications for use in aircraft engines, industrial printers, and optical systems. For example, graphite is biochemically an [inaudible] which makes it useful for internal medical applications such as heart valves. POCO has the only graphite approved by the FDA for use in human implant applications.

The transaction will be an all cash deal valued at $158 million. We expect this to be neutral to earnings in 2008 and accretive in 2009. A portion of the deal is being financed by cash on hand and the majority financed by a revolving credit facility. A key to part of our strategy is to leverage our materials science expertise and use this to diversify our business and address a broadening array of high performance applications. We see POCO as an important and exciting step along that path that will allow us to build shareholder value.

With that, we’ll now take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Brett Hodess - Merrill Lynch.

Brett Hodess – Merrill Lynch

First, if you look at the price, the $158 versus the $65 million in sales, that’s a relatively high price to sales multiple for items in [inaudible] historically. Typically to get that kind of price sales multiple, the acquisition candidate has pretty high margins, usually well above industry average. Is that the case here with POCO, and can you give us some kind of idea about the profitability?

Gregory Graves

The margins are in line generally with our corporate average, the gross margins. From a profitability perspective, we’re paying about 8.5 times EBITDA for this business. I mean it is very strong; it’s a very strong cash flow business. I think the other thing that I would comment on here is that for me from a financial perspective, this is an incredibly attractive business because it has a very diverse customer-base; it’s had a very long history of relatively consistent growth.

It hasn’t seen the ups and downs in the cycles the last three or four years that other businesses in the states have seen. In fact, in 2007, they actually grew their semiconductor-related business pretty significantly. So I’m very comfortable with the valuation. Like I said, an 8.5 times EBITDA in this market, we feel very good about that.

Brett Hodess – Merrill Lynch

It sounds like based on some of your comments, Gideon, that part of the excitement here is that they’re starting to move into areas that were traditionally done by other materials and that could give you, accelerate the growth rate and maybe Entegris can help them move into some of those other applications more quickly. Is that correct, and can you give us an idea of what you think some of the new market opportunities might give you in terms of growth rates in the near-term. I know you said longer term 10% growth, but could be it higher than that as some of these things are adopted?

John Goodman

One of the things to keep in mind is that overall we’re really developing a materials-based business strategy, and there are a number of industries where we’re seeing a consistent need for higher temperature materials, bio compatible materials, cleaner materials, materials with corrosion and wear characteristics that are different from the materials available today.

What we’re doing with POCO is combining the unique attributes of their graphite products with some of our internally developed carbon [inaudible] through polymers and our coatings business to develop a suite of solutions that we can take to specific industries.

So to get to your question: In the medical area, virtually all of the heart valves that have been used really since the graphite was used in heart valves that have been produced by POCO, there are applications in the medical industry that will combine some of the graphite with some of our coatings capabilities and we’ll begin to see some very high value applications where we can expand our penetration and growth in that area. The same can be said for aerospace and industrial applications where we’ve identified an entire suite of materials properties needs that we can now meet with the addition of Poco Graphite.

So I think that you’re exactly right, one of the things that excites quite a bit is that while it’s very strong in the semiconductor industry and we have a very complimentary set of consumable products to what we already offer, we’re really going to be able to target selective applications in some very good high growth markets to expand our diversification effort.

Gideon Argov

Brett, just another point, which is in line with what John just mentioned, and that is in the same vein, the vast majority of POCO’s revenues are in North America today; and we see a natural, an immediate opportunity to start to introduce this technology to our international organizations, particularly in Asia and Japan where POCO has a variable presence and where there is some competition. But where POCO’s I would say unique proprietary capabilities are, as far as we can tell, just as potent as they would be in North America.

Brett Hodess – Merrill Lynch

If you look at the manufacturing capability of POCO, do you need to make investments there to expand it in the near-term or do they have enough to meet what you see as growth trajectories?

Gideon Argov

POCO is located on extensive, I would characterize it as an extensive and fully integrated facility in Decatur, Texas, and unless there would be an application where large real estate would be coated with graphite, I don’t think there’s any real issue as far as capacity over the next few years, not at all, Brett.

Operator

Your next question comes from Analyst for Timothy Arcuri - Citigroup.

Analyst for Timothy Arcuri – Citigroup

First, Greg, is there any sort of specifics you can provide on the level of accretion that you expect in ’09 from the sale?

Gregory Graves

We expect accretion in ’09 to be $0.05 plus.

Analyst for Timothy Arcuri – Citigroup

$0.05 plus, that’s on a GAAP basis?

Gregory Graves

That is on a cash EPS basis.

Analyst for Timothy Arcuri – Citigroup

I guess from a synergistic standpoint, is there anything you can talk about with respect to either the manufacturing side or the sales side that you guys see potential here?

John Goodman

The company has been operated in a very lean fashion and they have a very unique set of manufacturing capabilities, so we really won’t see any synergies there. Overall, the main synergies we’re going to see are not financial; although, we’ll certainly leverage our corporate infrastructure. What we’re really going to see is the ability to combine the efforts of the sales force with the Entegris sales force to serve the semiconductor market and that will give us a lot of strength, but it’s a very complimentary set of capabilities.

Then the synergies we’re gong to see are actually, as Gideon said, being able to take this technology, represent it in Asia and Japan, as well as to combine it with some of our other material science capabilities and actually create new classes of materials that will take us into new applications.

Analyst for Timothy Arcuri – Citigroup

Is POCO a completely direct sales force channel at this point or is there some distribution here as well?

John Goodman

It depends on the market. In semiconductors, it’s principally a direct sales force dealing mainly with the OEM. In other markets like EDM, it’s primarily through distribution around the world because that serves a very large and a broad customer-base, so it’s specific to the market and the application.

Operator

Your next question comes from Dan Leonard - First Analysis.

Dan Leonard – First Analysis Corporation

I was just wondering if you could offer up some background on the transaction, who courted who; was this a shop deal?

Gideon Argov

The reality is we have an internal business development team which is very knowledgeable about our business and the technologies that are around our business, so we did not use any intermediaries. To answer your question: We initially went to POCO. We found them; we talked to them, and then things progressed from that point.

Operator

We have no questions at this time, sir.

Gideon Argov

Thank you very much for participating on the call and look forward to speaking again.

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