Costa Mesa-based Ceradyne Inc., a manufacturer of advanced technical ceramic products for military and civilian uses, announced to acquire privately-held SemEquip, Inc. for $125 million. The Massachusetts-based SemEquip makes equipment used in the production of semiconductors. 

SemEquip develops cluster ion implantation sub-systems and advanced ion source materials for the manufacture of logic and memory chips which owns a significant patent portfolio related to the use of cluster chemicals in semiconductor ion implantation. Ceradyne hopes that, the acquisition will expand  its Boron Products’ business and will extend the company’s market opportunity in the semiconductor industry.

Reportedly, Ceradyne acquired EaglePicher Boron, LLC in August 2007 for $69 million that produces chemicals used in the production of chips, mainly the boron isotopes 10B and 11B. EaglePicher Boron LLC is presently known as Ceradyne Boron Products, LLC.

David Reed, Ceradyne’s President, North America Operations said about the acquisition, “The SemEquip acquisition follows the model we have successfully used in the past; that is, the vertical integration of raw material to final product. Ceradyne Boron Products, a 2007 acquisition, will produce the elemental boron for the Cluster Boron molecule and elemental materials for additional proprietary molecular products for SemEquip. A similar strategy was incorporated in the 2004 ESK Ceramics acquisition where ESK Ceramics produces the Boron Carbide powder for Ceradyne’s U.S. armor operations, and again in the 2007 acquisition of Minco, where Minco produces the high-purity fused silica powder for use in Ceradyne’s photovoltaic solar ceramic crucibles.”

According to Ceradyne’s Vice President of Nuclear and Semiconductor Business Units, Michael Kraft, “SemEquip leverages Ceradyne Boron Products’ technology, complements our existing semiconductor business, and advances Ceradyne’s strategy to grow commercial revenues through acquiring advanced materials businesses that have high-margin, recurring revenue streams that serve high-growth markets.”

Ceradyne has come to an agreement to pay $25 million in cash now and contingent payments of up to $100 million during the next 15 years, based upon revenues achieved by SemEquip over that period. Ceradyne will require to record a pre-tax accounting charge of $9 million to $11 million in the quarter during which the acquisition is completed. The acquisition is expected to complete in the third quarter of this year.

This entry was posted on Friday, July 11th, 2008 at 12:58 pm and is filed under Venture Capital News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.