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Umicore agrees to buy Sterling Semiconductor from Uniroyal

Umicore USA, a subsidiary of the Belgian materials company Umicore (formerly Union Miniere) has entered into an agreement to buy the outstanding shares of Sterling Semiconductor, a subsidiary of Uniroyal Technology Corp. (UTCI).

Umicore will pay approximately $13 million in cash for Sterling, which is the world s second largest producer of SiC substrates after Cree. The acquisition includes three production sites in Virginia, Connecticut and Florida and approximately 50 people.

Performance-related payments are also included in the agreement, and Umicore will be issued a five-year warrant for approximately 3% of UTCI s stock. The deal is due to be completed in May, subject to certain regulatory requirements and customary closing conditions.

Sterling Semiconductor, headquartered in Sterling, Virginia, was acquired by UTCI in April 2000. A large amount of investment was made to increase Sterling s SiC wafer production capacity as well as to accelerate epiwafer and device development (see Uniroyal Technology Corporation accelerates silicon carbide epitaxy and device production). Recently, UTCI, which manufactures high-brightness LEDs, has been suffering from a severe financial crisis and laid off 90 staff in early January.

"There are only positives in this transaction," said Howard Curd, chairman and CEO of Uniroyal. "It puts Sterling in the ownership of a financially strong parent, which will maximize the long-term potential of the business while allowing Uniroyal to participate in its success. This agreement also enables UTC to improve liquidity while allowing us to focus on our Optoelectronics business and maximize its long term potential.

Umicore is the leading producer of germanium substrates that are used to fabricate compound semiconductor-based solar cells. In addition to extending the use of germanium to other applications, Umicore says that its strategy is to broaden its expertise in substrate technology, and that it is already involved in a number of research projects involving the development of InP and SiC substrates. The company is also assessing the potential of activities such as epitaxy, where Sterling has established expertise.

For the financial year ended September 30, 2001, Sterling had sales of approximately $3.7 million and an operating loss of $7.0 million. Sterling has attracted funding from various US government agencies, and Umicore expects its new business to make a positive contribution to its earnings commencing in 2004. Moniek Delvou
Tel. +32 2 227 70 63
E-mail: Moniek.delvou@umicore.com
Web site: http://www.umicore.com

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