Emcore sells TurboDisc business to Veeco
The transaction is valued at up to $80 million, with $60 million in cash when the deal closes and up to an additional $20 million over two years. Emcore will receive from Veeco 50% of all revenues of the TurboDisc business over $40 million in each of the next two years to an aggregate maximum payout of $20 million. Revenues for the twelve month period ending June 30, 2003 were approximately $51 million, down from a peak of $135 million for the twelve months ended September 30, 2001.
The transferred MOCVD business includes the assets necessary for engineering, design and manufacturing of TurboDisc MOCVD systems, the business unit s manufacturing facility and applications lab located in Somerset, New Jersey and Emcore s significant MOCVD intellectual property. It is expected that approximately 120 employees of Emcore involved in the TurboDisc business will become employees of Veeco.
The acquisition significantly expands Veeco’s interest in epitaxial technology, which began when it acquired Applied Epi, a manufacturer of MBE systems, in 2001. It also gives Veeco a unique slant to its business as it will be the only company to offer both MOCVD and MBE systems.
Emcore has been expanding its optical communications products business for some time, most notably through the purchase of Agere’s West Coast optoelectronics operation in January this year. Since then, the MOCVD side of its business has accounted for less than half of the company s income. Emcore believes that the remaining product lines will generate $90-$100 million in revenues for the fiscal year ending September 30, 2004.
“This transaction will allow us to devote our full attention to the communications sector and our investment in Gelcore, our joint venture with GE Lighting addressing the LED markets," said Reuben Richards, president and CEO of Emcore.
"This acquisition strengthens Veeco s position in the compound semiconductor market, as we are now uniquely able to provide ‘one-stop’ shopping for epitaxial deposition solutions -- both MOCVD and MBE,” said Edward Braun, chairman and CEO of Veeco. “The MOCVD market is twice the size of the MBE available market. Emcore s MOCVD business is a good fit with Veeco s acquisition criteria: history of technology leadership and innovation, complementary technology for an existing Veeco market, leading market position, strong R&D and high market growth potential.”
