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Axcelis sells SEN share to Sumitomo Heavy Industries for US$132 million

26 February 2009 | By Mark Osborne | News > Wafer Processing

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Perpetual loss-making semiconductor equipment supplier, Axcelis Technologies has sold its 50% share in SEN Corporation of Japan to Sumitomo Heavy Industries (SHI) for approximately US$132.6 million. SEN will become a wholly-owned subsidiary of SHI. Axcelis currently has a market capitalization of US$17.5 million.

The purchase of the 6,000 shares owned by Axcelis values SEN at approximately US$250 million. According to preliminary figures from market research firm, VLSI Research, SEN had sales of between US$80 million and US$100 million in 2008, and a share of the ion implant market below 10%.

In January, 2009, Axcelis missed the payment date on a Convertible Senior Subordinated Note, valued at approximately US$85 million, after failing to raise the capital to repay the loan.

Last year, SHI had proposed the acquisition of Axcelis for US$6.00 per share, a 48.5% premium to Axcelis’ stock price of US$4.04 on February 8, 2008. However, Axcelis management did not accept the offer and the possible deal collapsed. Axelis shares are currently well below US$1.00 and is under threat of delisting from NASDAQ.

According to VLSI Research, Axcelis has been losing market share in the ion implant sector for many years and would now control less than 10% of the market. Varian Semiconductor has the largest market share.  

Although the sale of its SEN share provides Axcelis with desperately needed cash to repay the outstanding loan and ongoing operational expenses, the company loses an estimated 30% or more of its revenue stream with the SEN sale.

The company has not conducted financial conference calls with analysts and shareholders for two consecutive quarters. With the drastic capital expenditure cuts being made across the semiconductor industry, Axcelis as going concern is hanging by a thread.

Mary Puma, Chairman and CEO of Axcelis, said: "This transaction serves the best interests of Axcelis shareholders as it enables us to fulfill our senior debt obligations and gives us greater financial flexibility during this difficult economic climate and semiconductor industry downturn. Axcelis will continue to fully focus its efforts on tight cash and cost controls and on developing and selling innovative products like our Optima implanters and Integra dry strip tools, both of which have received strong customer reviews. With these products, Axcelis believes that we can compete and gain market share once demand for semiconductor equipment returns."

 

Related articles

Sumitomo increases price and makes further bid for Axcelis - 10 March 2008

Axcelis and SHI to start merger talks - 06 June 2008

Axcelis gains US$35.9 million from sale of SEN Corp to SHI - 30 March 2009

Axcelis rejects second offer from Sumitomo - 17 March 2008

Axcelis taps Applied Materials to service equipment in Japan - 22 June 2009

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