MKS Instruments To Buy Atotech For $5.1 Billion To Expand Chipmaking Offerings

Semiconductor equipment maker MKS Instruments Inc said on Thursday it will buy specialty chemicals group Atotech Ltd for about $5.1 billion to expand its chip manufacturing capabilities.

The cash-and-stock deal includes $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech share, or a per share value of about $26, according to Reuters calculations. MKS, which has a market capitalization of about $10 billion, will fund the acquisition through cash and debt financing.

The offer represents a premium of about 10% to Atotech's closing price on June 10, when Reuters reported MKS had approached Atotech with an acquisition offer.

The deal comes at a time the chip industry has been dealing with a global shortage of semiconductors that has shuttered some auto production lines and its impact has been felt in other areas, including consumer electronics.

MKS approached Berlin-headquartered Atotech after it lost out to II-VI Inc in a bidding war for laser maker Coherent Inc in February.

Atotech, backed by buyout firm Carlyle Group Inc, made its U.S. public market debut in February at $17 per share. The company makes chemicals and equipment for printed circuit boards and semiconductors that are used in smartphones, appliances and heavy machinery.

MKS approached Berlin-headquartered Atotech after it lost out to II-VI Inc in a bidding war for laser maker Coherent Inc in February.

"We want to participate in all the profit pools for advanced electronics. Partnering with Atotech and having the scale is going to allow us being stronger in committing R&D to our customers throughout downturns," MKS Chief Executive John Lee said in an interview.

The deal, expected to close by the fourth quarter of this year, will bring more recurring revenue streams and expand MKS' offerings in chip manufacturing through the addition of Atotech's plating chemicals, especially on rigid circuit boards that are widely used on smartphones, laptops and cars, according to MKS.

Andover, Massachusetts-based MKS' shares were down 3.7% at $171.35 on Thursday, while Atotech was down 1.45%.

Perella Weinberg Partners acted as MKS' financial adviser, while Credit Suisse was Atotech's financial adviser.