Cabot Microelectronics to buy Epoch
Cabot Microelectronics Corp. a leading supplier to the semiconductor industry, announced today that it has agreed to acquire Epoch Material Co. Ltd., a consolidated subsidiary of Eternal Chemical Co., Ltd. for about $66 million.
Epoch is a Taiwan-based company specializing in the development, manufacture and sale of copper CMP slurries and CMP cleaning solutions to the semiconductor industry, as well as color filter slurries to the liquid crystal display industry. Cabot will initially obtain 90 percent of Epoch's stock, with the remaining 10 percent to be transferred 18 months later. During this interim period, Eternal will hold a minority ownership interest in Epoch.
Cabot expects to capitalize on Epoch's prominent technology in copper CMP slurries, strong customer relationships and extensive infrastructure in Taiwan. Additionally, Epoch's LCD color filter slurry business represents a strategic fit with Cabot's engineered surface finishes business, whereby the company seeks to utilize its expertise in CMP slurry formulation, materials and polishing techniques developed for the semiconductor industry and apply it to other demanding surface modification applications.
"We are excited to partner with Epoch to combine our efforts and enhance our collective ability to deliver world-class products and support our customers around the world. Epoch has a strong presence in Taiwan, where we currently have more revenue in our core CMP consumables business than in any other country. Given our substantial customer base in Taiwan, we view this transaction as an attractive means to expand our presence there and leverage the strong local relationships, business knowledge and infrastructure that Epoch has built over time," William Noglows, Chairman and CEO of Cabot Microelectronics said in a statement. "Eternal has nurtured and supported Epoch in its development to date, and we are pleased to have Eternal's ongoing involvement through its continued minority ownership in Epoch in the near term. Additionally, we believe this transaction represents an excellent opportunity to strengthen our copper CMP slurry leadership by leveraging our combined technology teams and development infrastructure to innovate high-performance, low cost of ownership products."
Tsung-Ho Lee, Epoch's general manager, said in a statement, "We are delighted to become an integral part of Cabot Microelectronics' core CMP business. We believe that by joining forces with the leader in CMP slurries, we will have access to significantly more resources, securing a brighter future and greater growth prospects for our employees. We look forward to expanding our presence outside of Taiwan and China through the utilization of Cabot Microelectronics' global sales infrastructure and close customer relationships. Both companies have a passion for technology innovation and close customer engagement, and we look forward to integrating our similar entrepreneurial cultures and achieving our goals together."
Epoch, established in 1999, expects to achieve around US$28 million in revenue in 2008. It has grown to approximately 150 employees and operates manufacturing, research and development, warehousing and administrative functions from its headquarters in the Kaohsiung Science Park in southern Taiwan. As a result of this transaction, Cabot Microelectronics expects to improve its overall cost structure by capitalizing on the collective best-in-class technologies, employee talent and global infrastructure of both companies. Initially, cost savings are expected to be achieved principally through eliminating overlapping efforts, as well as capitalizing on supply chain management efficiencies, through the utilization of a shared global infrastructure. In the longer term, Cabot Microelectronics aims to leverage Epoch's low cost, world-class manufacturing operations in Taiwan to manufacture additional CMP slurries for customers in the region.