Dutch chipmaker ASML Holding NV [NASDAQ: ASML] agreed to acquire Taiwan’s Hermes Microvision Inc. (HMI) (TWSE: 3658) for 100 billion New Taiwan dollars ($3.09 billion) in cash.
The combination will allow ASML and HMI to further integrate and enhance their product offering at an accelerated pace. The integrated offerings will address the challenges chipmakers are facing as they enter sub-10 nanometer resolutions and 3D integration. The two companies are leaders in their respective fields and are already developing joint approaches that IC manufacturers can use to improve yields in the production of the most advanced microchips.
The transaction, which was unanimously approved by the boards of directors of ASML and HMI, will entitle each HMI shareholder to receive TWD 1,410 per share in cash. The price per share reflects a premium of 31 percent over HMI`s 30-day volume-weighted average price (VWAP).
The transaction would be one of the biggest inbound acquisitions for Taiwan, an island known for its tech industry, according to Reuters. It comes after U.S. memory chipmaker Micron Technology Inc said late last year that it planned to buy the remaining interest in its Taiwanese joint venture in a deal valued around $3.2 billion. It would also be the latest consolidation in a global semiconductor industry faced with an increasingly saturated smartphone market – once a key growth driver – as well as the emergence of deep-pocketed Chinese players, Reuters added.
“This acquisition is intended to make a strong product offering even stronger,” said ASML president and CEO Peter Wennink. “Our metrology technologies are complementary, and when combined offer the chance to significantly improve process control, and hence yields, for our customers. Our two companies have worked together for almost two years to see how we could best combine our capabilities, and found that we could significantly improve this constructive cooperation and better serve our customer by teaming up as one company.”
“The combination of our two businesses is great news for all of our stakeholders, including our customers, employees, suppliers and investors, as it accelerates both companies` roadmap development. We intend to continue to invest and grow HMI`s business at our two existing locations in Taiwan, where we already employ around 350 people. The transition to sub-10 nm logic nodes and the ramp of advanced memory devices require innovation, and we look forward to continuing to help our customers make it a success, now by offering HMI and ASML technologies,” said Jack Jau, CEO at HMI.
The transaction is expected to close in the fourth quarter of 2016 and is subject to customary closing conditions, including review by Taiwanese, U.S. and international regulators. Closing is also subject to approval by HMI`s shareholders.
Hermes-Epitek Corp. (HEC) and certain affiliates, as well as certain officers of HMI, currently own approx. 48% of HMI shares in total and have agreed to support the transaction. HEC and certain HMI officers have also agreed to re-invest in ASML part of their proceeds.
ASML expects to finance the acquisition with EUR 1.5 billion of debt, EUR 500 million of ASML equity to be purchased by HEC and the relevant HMI officers, and the remainder from available cash. The transaction is expected to be accretive to ASML`s EPS immediately.
Goldman Sachs and Credit Suisse acted as financial advisors on the deal for HMI and ASML respectively.
ASML is one of the world`s leading manufacturers of chipmaking equipment. ASML`s guiding principle is continuing towards ever smaller, cheaper, more powerful and energy-efficient semiconductors. ASML is a multinational company with close to 15,000 employees at over 70 locations in 16 countries, headquartered in Veldhoven, the Netherlands.
HMI is the leading supplier of E-beam Inspection (EBI) tools for both foundry and memory fabs worldwide. Established in 1998, HMI is engaged in ongoing research and development of the most advanced EBI tools for semiconductor manufacturing fabs, based on its proprietary electron gun and column technologies and defect inspection algorithms. HMI delivers multiple product lines, including eScan, ePTM and eXplore Series, for various R&D and production applications, with it e-beam system positioned for sub-10 nm logic nodes.