The Atotech transaction strengthens MKS’ ability to address the acceleration of the next frontier in miniaturization and complexity for Advanced Electronics manufacturing, and we are looking forward to combining our highly complementary expertise and capabilities to Optimize the Interconnect℠.
Finishing & Coating Magazine recently interviewed MKS President and CEO John T.C. Lee about the Atotech acquisition:
The combined company will be better positioned to benefit from their respective capabilities to optimize the interplay between chemical processes and via drilling to help solve customer challenges on next-gen architectures. This via formation workflow is unique to the industry and MKS believes this workflow can enable market share gain within an ~$4.5B SAM.
High performance interconnects are the “highways” that carry the massive quantities of data between semiconductors, sensors, and other components in Advanced Electronic devices. We believe that Optimizing the Interconnect requires a cross collaboration of laser-based processing and advanced chemistry applications to meet rapidly evolving customer requirements.
For example, a high-density interconnect PCB in a mobile device has evolved over time. Since 2007, the number of vias on an HDI PCB panel has increased more than 4 times, from 250 thousand to more than 1 million. This has also resulted in a more than 60% decrease in the size of the lines and spaces, as well as the diameters of the vias. These smaller geometries and greater density have been vital to enabling more functionality in our phones, such as more cameras, microphones, facial recognition, LiDAR front camera, 5G antennas, and more. These changes have also made it possible for smartphone makers to build in larger batteries while delivering thinner form factors. We believe these trends will only continue over time, and we are excited to harness our combined capabilities to accelerate new designs and roadmaps for our customers.
In addition, Atotech’s General Metal Finishing (GMF) business is well positioned to benefit from a number of attractive secular trends such as automobile premiumization, electrification and light-weighting, as well as the industry transition to sustainable surface-processes such as hexavalent chromium-free solutions. GMF also provides chemical processes for 5G applications and for renewable energies, such as solar and wind turbines.
“The acquisition of Atotech positions MKS to accelerate roadmaps for future generations of advanced electronics devices. By combining leading capabilities in lasers, optics, motion and now process chemistry, MKS is set to be a leader in the next frontier for miniaturization and complexity: Optimizing the Interconnect℠, a significant enabling point of next-generation advanced electronics. Atotech’s leadership in functional and decorative surface finishing will also extend MKS’ product offering for industrial applications and grow our market reach. I could not be more excited to welcome the Atotech team to the MKS family.”
Together, MKS and Atotech will be well positioned to drive faster, better solutions for customers in advanced electronics. By combining leading capabilities in lasers, optics, motion and process chemistry, the combined company will be positioned to Optimize the Interconnect℠, a significant enabling point of next-generation advanced electronics that represents the next frontier for miniaturization and complexity. With functional and decorative surface finishing, MKS will extend its product offering for industrial applications and grow its market reach.
MKS believes that growing miniaturization and complexity in electronics drives the need for PCB and Packaging innovation. Atotech brings leading Process Chemistry and Equipment expertise to MKS, which has leading via drilling expertise (laser-material-interaction expertise). The combined company will be better positioned to benefit from their respective capabilities to optimize the interplay between chemical processes and via drilling to help solve customer challenges on next-gen architectures. This via formation workflow is unique to the industry and MKS believes this workflow can enable market share gain within an ~$4.5B SAM. Attractive cross selling opportunity: Atotech can leverage MKS’ leadership in Flex, and MKS can leverage Atotech’s leadership in HDI to position the combined company to accelerate customer roadmaps. MKS and Atotech have complementary customer solutions in key advanced electronics markets, with MKS’ expertise in via drilling and Atotech in electroplating and chemistry. PCBs, packaged substrates and semiconductors are becoming increasingly complex as miniaturization is creating new challenges where reliability, productivity and peak performance are critical. The roadmap for next generation interconnects continues to accelerate the need for more integrated solutions that enable yield and throughput gains. We expect that our combined expertise and know-how across lasers, materials processing and the complex applications they support will provide opportunities for collaboration, innovation and continual ground-breaking solutions for our customers. This in turn, should shorten development time for optimum chemical recipes, allowing faster time to market. In addition, streamlined ownership of chemical and laser processes facilitates continuous improvement and issue resolution.
Atotech will be a separate division within MKS — the Materials Solutions Division — and will continue to focus on delivering outstanding solutions to its customers. In addition, we anticipate over time that the combined technical expertise and customer relationships will provide opportunities for increased collaboration to drive faster, better solutions for our customers. MKS has a committed leadership team, including Jim Schreiner who is leading the Materials Solutions Division. We also have a dedicated staffed integration team to support a formal and healthy integration. This will be a long process and we appreciate your patience as we work through the different phases.
MKS and Atotech have complementary customer solutions in key advanced electronics markets, with MKS’ expertise in via drilling and Atotech’s expertise in electroplating and chemistry. PCBs, packaged substrates, and semiconductors are becoming increasingly complex as miniaturization is creating new challenges where reliability, productivity and peak performance are critical. The roadmap for next generation interconnects continues to accelerate the need for more integrated solutions that enable yield and throughput gains. In addition, there is no overlap with Atotech’s General Metal Finishing (GMF) business, which in turn will bring new opportunities to MKS in industrial markets.
Customer focus is a top priority for MKS and Atotech. You will continue to receive the outstanding customer service and service you have come to expect from us. At this time, you will not see any changes.
You should continue to reach out to your main point of contact.
Please proceed as usual. The announcement does not impact pricing, terms, or conditions on outstanding quotes.
Atotech Limited continues to be a separate corporate entity, but it is owned by the ultimate parent company, MKS. For most contracts, Atotech (or its applicable subsidiary) will continue to be the contracting party. The finance and legal teams will give guidance as needed. Therefore, you will not need to change the Atotech supplier account.
No, there are no changes to the current product offerings or long-term product roadmaps on day one. Over time, MKS and Atotech will be uniquely positioned to drive faster, better solutions for customers in advanced electronics. By combining leading capabilities in lasers, optics, motion and process chemistry, the combined company will be positioned to Optimize the Interconnect℠, a significant enabling point of next-generation advanced electronics that represents the next frontier for miniaturization and complexity.
Yes, customers will be able to purchase Atotech products just as before and you should expect the same levels of service and support you have come to expect from Atotech.
As soon as practicable after the closing of the acquisition, Atotech shareholders will receive $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech ordinary share. Former Atotech shareholders may contact the exchange and paying agent AST Financial at +1 800 937-5449 or +1 718 921 8124 for share exchange information.
The statements in this communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the business prospects and growth of MKS Instruments, Inc. (“MKS” or the “Company”). These statements are only predictions based on current assumptions and expectations. Any statements that are not statements of historical fact (including statements containing the words “will,” “projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,” “continues” and similar expressions) should be considered to be forward-looking statements. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are the substantial indebtedness MKS incurred in connection with the Atotech acquisition and the need to generate sufficient cash flows to service and repay such debt; the terms of MKS' existing credit facilities, under which MKS incurred such debt; MKS’ entry into Atotech’s chemicals technology business, in which MKS does not have experience and which may expose it to significant additional liabilities; the risk of litigation relating to the Atotech acquisition; unexpected costs, charges or expenses resulting from the Atotech acquisition; the risk that disruption from the Atotech acquisition materially and adversely affects the respective businesses and operations of MKS and Atotech; the ability of MKS to realize the anticipated synergies; cost savings and other benefits of the Atotech acquisition; including the risk that the anticipated benefits from the transaction may not be realized within the expected time period or at all; competition from larger or more established companies in MKS’ and Atotech’s respective markets; the ability of MKS to successfully grow its business and the businesses of Atotech, Photon Control, which it acquired in July 2021, and Electro Scientific Industries, Inc., which it acquired in February 2019; potential adverse reactions or changes to business relationships resulting from the completion of the Atotech acquisition; conditions affecting the markets in which MKS and Atotech operate, including the fluctuations in capital spending in the semiconductor industry and other advanced manufacturing markets, and fluctuations in sales to MKS’ and Atotech’s major customers; manufacturing and sourcing risks, including the impact and duration of supply chain disruptions, component shortages and price increases, and changes in global demand and the impact of the COVID-19 pandemic with respect to such disruptions, shortages and price increases; the ability to anticipate and meet customer demand; the challenges, risks and costs involved with integrating the operations of the companies we have acquired; potential fluctuations in quarterly results; dependence on new product development; rapid technological and market change; acquisition strategy; volatility of stock price; international operations; financial risk management; and the other factors described in MKS’ most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, and the other filings we make with the U.S. Securities and Exchange Commission (the “SEC”) from time to time, including without limitation the Current Report on Form 8-K filed with the SEC on August 17, 2022. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter these forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release.