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Now that listed Applied Materials has completed its solar acquisition spree, next up could be listed Rohm & Haas, industry sources told mergermarket. The goal is to move into a promising growth sector.
”We already bought three companies. One more acquisition will drive everybody nuts,” said Tak Tanaka, senior director of Applied Materials’ displays unit in an interview in New York.
The two-year, USD 1bn splurge bolstered the Santa Clara, California-based manufacturer of semiconductor making equipment in a growth sector that is already yielding results, he said. Applied Materials is the largest in its sector.
Rohm & Haas of Philadelphia, the specialty chemicals and electronic materials supplier, might be interested in some of the smaller US companies Applied Materials might pass up, industry sources and company insiders said. A move would bolster the company’s growing Electronic Materials Group, which accounted for 19% of 2007 revenue, as part of the company’s Vision 2010 plan.
Two listed targets could include listed Ascent Solar Technologies, of Littleton, Colorado, and Solar Thin Films of Dix Hills, New York, industry sources said.
A Rohm and Haas VP declined comment but said the company remains committed to bolstering electronic materials while exiting slower-growth sectors such as automotive coatings. Rohm & Haas bought listed Eastman Kodak’s light management films unit for USD 40m last year and put it into a joint venture for electronic displays with South Korea’s SKC. Many of the technologies used for electronic displays are required to make solar chips.
Rohm & Haas, with a market capitalization of USD 10.05bn, reported cash of USD 265m in the fourth quarter and full-year cash flow exceeding USD 960m
An Ascent Solar VP said the company, with a market capitalization of USD 153m, plans to remain independent but with many strategic partnerships. Last month alone, Ascent Solar extended a partnership with Norway’s listed Norsk Hydro, owner of a 23% stake, and announced a new relationship with listed Japanese trading giant Itochu.
Solar Thin Films, with a market capitalization of USD 51m, has been developing photovoltaic thin film modules in competition with Applied Materials and others in the sector. The 20-year-old company, previously acquired a Hungarian solar start-up, Kraft, and acquired a minority stake in China’s WenHai Photovoltaic from listed China Solar Energy Holdings.
Representatives did not respond to calls for comment. In a recent filing, Solar Thin Films reported USD 20.6m in cumulative losses through 30 September. It also raised about USD 3.3m in December for a subsidiary, Solar Thin Power.
Solar Thin Films CFO Robert M Rubin, 66, controls about 13% of the company through a family trust. Rubin had been CEO of listed SuperiorCare before its 1993 sale to listed Olsten. Director Zoltan Kiss, a founder of Kraft, controls about 19%, according to filings.
Meanwhile, other smaller listed US rivals have just started moves into solar. Last month, No. 2 listed KLA-Tencor of San Jose, California, said it will acquire Belgium’s listed ICOS Vision Systems for USD 465m. The move adds solar chips to KLA-Tencor’s products long used for inspecting integrated circuits. A senior VP said the company will not follow Applied Materials into thin films.
Applied Materials reported cash and investments exceeding USD 2.1bn as of 27 January and could well make acquisitions in more traditional sectors, Tanaka said.
Tanaka said his company’s deals came at a good time, just before the spike in oil prices stimulated demand for renewable energy sources. Adding photovoltaic films to Applied Materials’ product mix benefited the company he said, leading to this month’s USD 1.9bn order for solar-panel equipment from an undisclosed non-US customer.
The executive declined to identify the buyer. Applied Materials may provide more details at its annual meeting on Tuesday.
Applied Materials this quarter completed the USD 330m acquisition of private Baccini of Italy, a specialist in photo-voltaic films for solar panel-making. That followed last year’s USD 474m acquisition of Switzerland’s private HCT Shaping Systems and the 2006 acquisition of listed Applied Films of Longmont, Colorado, for USD 286m.
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