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  • Semitool, Inc. (Nasdaq: SMTL) Buzz Stock of the Day 0 comments
    Nov 17, 2009 3:18 PM | about stocks: SMTL, AMAT

    Semitool, Inc. (Nasdaq: SMTL) shares soared Tuesday after Applied Materials, Inc. (Nasdaq: AMAT) announced that they had entered into a definitive agreement to acquire Semitool for an aggregate purchase price of approximately $364 million in an all-cash tender offer based on the fully diluted capitalization of the company.

    “As part of Applied Materials, we can accelerate the global adoption of the technologies Semitool has developed,” said Ray Thompson, chairman of Semitool. “With this agreement, we are providing our employees with a strong future and our stockholders with exceptional value.”

    The announcement sent Semitool shares up over 30 percent to the to nearly the $11-a-share buyout price, which is a 31 percent premium above Semitool's Monday closing price of $8.40. Applied Materials was trading down 1.5 percent Tuesday after the deal was announced. The deal is expected to close by the end of the year, and Applied forecasts the purchase of Semitool to add value to the company’s bottom line within two years.

    Semitool, which is based in Kalispell, Montana, supplies electrochemical plating and wafer surface preparation equipment used by chip-packaging and chip-making companies. It will be operated as a unit of Applied's Silicon Systems Group.

    Mike Splinter, chief executive of Applied Materials, said in a statement Tuesday, "The semiconductor industry recovery is being fueled by global demand for mobile devices such as smartphones, notebook PCs and portable media players for music, gaming and books."

    Applied Materials, the world’s largest tool provider for the semiconductor industry, said the purchase will make it the leader in "advanced packaging and the memory industry's conversion to copper," which the company said are two of the faster-growing segments of the semiconductor business. Additionally, the acquisition will allow Applied to produce smaller and more adept microchips. Splinter continued,

    "With this acquisition, Applied will help the world's leading chipmakers create ever-smaller and more powerful devices."

    For the fiscal year ended September 30, 2009, Semitool posted a net loss of $11.4 million, or 35 cents per share, versus net income of $6 million, or 19 cents per share, last year. Revenue dropped 42 percent to $139 million.

    The Semitool purchase is the second of the month for Applied after acquiring substantially all of the assets of Advent Solar Inc. for an undisclosed cash amount on Nov. 6. The Albuquerque, New Mexico-based Advent Solar develops technology for crystalline silicon photovoltaics.

    Although many analysts have praised the deal as “a good fit” and “a great acquisition for Applied,” the deal is not without controversy given that Levi & Korsinsky is investigating the Board of Directors of Semitool for possible breaches of fiduciary duty and other violations of state law in connection with their attempt to sell the company to Applied Materials, Inc.

    The investigation concerns whether the Semitool Board of Directors breached their fiduciary duties to Semitool shareholders for the following reasons: the offer price is only a 13% premium over the $9.73 price that Semitool shares traded at as recently as October 12, 2009; furthermore, analysts set a mean price target of $12.00 for Semitool shares; and, finally, directors and executive officers of Semitool holding about 32% of the Company's outstanding common stock have agreed to support the deal.
    Stocks: SMTL, AMAT
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