- Expands UCT's semiconductor addressable market by $1.5 billion
- Increases UCT's vertical capabilities
- Further penetrates UCT's position in sub-fab solutions
- Adds higher gross margin, high value product offering
HAYWARD,
Calif., Oct. 25, 2023 /PRNewswire/ -- Ultra Clean
Holdings, Inc. (Nasdaq: UCTT), today announced that it has closed
the acquisition of HIS Innovations Group, a privately held company
based in Hillsboro, Oregon. HIS is
a leading supplier to the semiconductor sub-fab segment including
the design, manufacturing, and integration of components, process
solutions, and fully integrated sub-systems.
"This acquisition aligns with UCT's long-term strategy to pursue
sustained and profitable growth by offering a more diversified
portfolio of high-quality, high-value solutions to our customers,"
said Jim Scholhamer, CEO. "This
acquisition increases our vertical capabilities and synergies,
extends our reach into the sub-fab area, and expands our
addressable market by approximately $1.5
billion. With more than 60 new fabs being built, this
represents a meaningful growth opportunity."
"I am thrilled to join forces with UCT, a clear leader in the
semiconductor manufacturing sector," said Jason Frank, CEO, HIS Innovations Group. "This
combination provides a unique advantage in the sub-fab market
enabling HIS to accelerate its growth into new geographies and
expanding UCT deeper into the semiconductor manufacturing market.
This is a tremendous opportunity to bring new value to our
customers and other key partners."
Under the terms of the stock purchase agreement, UCT paid
$50 million in upfront cash
consideration for HIS, subject to customary post-closing
adjustments. UCT would be required to pay up to an additional
$50.0 million in cash earn-out
consideration based on HIS' achievement of adjusted EBITDA for the
2023 fiscal year. The upfront cash consideration, together with
this earn-out consideration, will equate to a price multiple of
8.3x HIS' 2023 adjusted EBITDA. UCT may also be required to pay up
to an amount equal to any unpaid portion of the 2023 earn-out
consideration plus an additional $20
million, based on HIS' achievement of certain financial
performance metrics in 2024 and 2025.
UCT anticipates the acquisition to be accretive to shareholders
on an adjusted basis. The HIS team will continue to be based in
Hillsboro and will report into
UCT's Products division.
Needham & Company, LLC served as financial advisor to UCT in
the acquisition and Davis Polk & Wardwell LLP served
as legal advisor to UCT.
($ in
Millions)
|
HIS Innovations
Group
|
|
2023E [1]
|
Revenue
|
$
56.7
|
|
Non-GAAP Gross
Margin
|
38.4
|
%
|
Non-GAAP Operating
Income
|
$
8.4
|
|
Non-GAAP Operating
Margin
|
14.7
|
%
|
Adjusted EBITDA
[2]
|
$
10.0
|
|
Adjusted EBITDA
Margin
|
17.6
|
%
|
|
[1] 2023E figures
reflect HIS Innovations Group management provided
estimates.
|
[2] Adjusted EBITDA
(unaudited) is defined as HIS' net income (loss) plus provisions
for (benefit from) taxes, interest expense, other expense (income),
other infrequent or unusual items and depreciation.
|
Use of Non-GAAP Measures
This release and the accompanying table include a discussion of
HIS' estimated Non-GAAP Gross Margin, Non-GAAP Operating Income,
Non-GAAP Operating Margin, Adjusted EBITDA and Adjusted EBITDA
Margin, which are non-GAAP financial measures that are used by
management to evaluate HIS' financial performance and should not be
considered a substitute for results provided in accordance with
accounting principles generally accepted in the United States of America ("GAAP"). HIS'
"Adjusted EBITDA" is defined as net income (loss) plus provisions
for (benefit from) taxes, interest expense, other expense (income),
other infrequent or unusual items and depreciation. The definition
of HIS' Adjusted EBITDA used in this press release may not be
comparable to the definitions as reported by other companies. We
believe these non-GAAP measures are relevant and useful information
because it provides investors with certain measurements to analyze
operating performance and enterprise value. A reconciliation of
HIS' estimated 2023 non-GAAP metrics disclosed above is not
available due to the uncertainty of the timing of the one-time
transaction costs and other items associated with the acquisition
and cannot be reasonably predicted or determined. As a result, such
reconciliation is not available without unreasonable efforts and we
are unable to determine the probable significance of the
unavailable information.
Safe Harbor Statement
This press release contains, or may be deemed to contain,
"forward-looking statements" (as defined in the US Private
Securities Litigation Reform Act of 1995) which reflect our current
views with respect to future events and financial performance. We
use words such as "anticipates," "projection," "outlook,"
"forecast," "believes," "plan," "expect," "future," "intends,"
"may," "will," "estimates," "see," "predicts," "should" and similar
expressions to identify these forward-looking statements.
Forward looking statements included in this press release
include, without limitation, statements regarding the acquisition
of HIS by UCT, the expected benefits of the transaction and future
opportunities for the combined company and HIS' estimated 2023
financial results. Forward-looking statements are subject to known
and unknown risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by such
statements. There are a number of important factors that could
cause actual results or events to differ materially from those
indicated by such forward-looking statements, including: (1)
unexpected costs, charges or expenses resulting from the
transaction; (2) UCT's ability to successfully grow its or HIS'
business; (3) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
transaction; (4) the retention of key employees, customers or
suppliers; and (5) legislative, regulatory and economic
developments, including changing business conditions in the
semiconductor industry markets overall and the economy in general
as well. These risks and other factors also include, among others,
those identified in "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations''
and elsewhere in UCT's Form 10-K, Forms 10-Q and other reports and
statements filed with the Securities and Exchange Commission.
Forward-looking statements are made and based on information
available to the company on the date of this press release. The
company assumes no obligation to update the information in this
press release, except as required by law.
About Ultra Clean Holdings, Inc.
Ultra Clean Holdings, Inc. is a leading developer and supplier
of critical subsystems, components, parts, and ultra-high purity
cleaning and analytical services, primarily for the semiconductor
industry. Under its Products division, UCT offers its customers an
integrated outsourced solution for major subassemblies, improved
design-to-delivery cycle times, design for manufacturability,
prototyping, and high-precision manufacturing. Under its Services
Division, UCT offers its customers tool chamber parts cleaning and
coating, as well as micro-contamination analytical services. UCT is
headquartered in Hayward,
California. Additional information is available at
www.uct.com.
About HIS
HIS is a market leading, ISO9001:2015
certified semiconductor sub-system supplier and equipment
integrator. HIS designs and manufactures custom and
off-the-shelf components, process solutions, and fully
integrated systems used throughout the semiconductor ecosystem from
Tier 1 OEMs to semiconductor manufacturing and advanced packaging
facilities. Offering early-stage R&D, solution-driven
engineering services, rapid prototyping, fabrication, and
high-volume production of components, weldments, and
electro-mechanical systems, HIS integrates a wide variety of
components and equipment into flexible and modular platforms
that aim to provide the best value for customers and a
one-stop-shop for a variety of applications.
Contact:
Rhonda Bennetto
SVP Investor Relations
rbennetto@uct.com
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SOURCE Ultra Clean Holdings, Inc.