Versum, Entegris to form electronic chemicals leader

Continuing consolidation in the business of supplying high-purity materials to the computer chip industry, Entegris and Versum Materials have agreed to combine in an all-stock “merger of equals” valued at $9 billion.

The merged company will have annual sales of about $3 billion and be “the world’s first comprehensive and effective end-to-end materials solutions provider across the entire semiconductor manufacturing process,” the two firms say.

With annual sales of about $1.6 billion, Entegris supplies materials, filtration and purification equipment, and fluid management products to the electronics industry. It got into the materials business in 2014 when it acquired the high-purity chemical maker ATMI.

Versum is a maker of deposition materials, specialty gases, and chemical mechanical planarization (CMP) slurries with sales last year of $1.4 billion. It was formed in 2016 when Air Products & Chemicals launched its electronic materials business on the stock market.

The combined company, which will take the Entegris name, will be owned 52.5% by Entegris shareholders and 47.5% by Versum shareholders. Its CEO will be Entegris CEO Bertrand Loy and its chair will be Versum Chair Seifi Ghasemi.

Top customers will include the semiconductor makers Intel, Samsung, SK Hynix, and Taiwan Semiconductor Manufacturing Co. Combined R&D spending will be about $170 million a year, according to a presentation for investors. The new firm will have close to 4,000 patents.

Announcement of the deal, which is expected to be completed in the second half of this year, follows by just two months the completion of another merger in the electronic materials industry: Cabot Microelectronic’s acquisition of KMG Chemicals for about $1.6 billion. Cabot Micro now has about $1 billion in annual sales of CMP slurries and high-purity cleaning chemicals used in semiconductor production.

In discussing that merger with analysts last year, Cabot Micro CEO David Li said the combined firm will be in the same size league as companies like Entegris and Versum. Given the pending merger of Entegris and Versum, that won’t be true for much longer.