CMC Materials goes up 25% following acquisition

Entegris Inc. (NASDAQ: ENTG) executed a definitive merger agreement with CMC Materials Inc. (NASDAQ: CCMP) whereby Entegris will purchase CMC for consideration of roughly $6.5 billion. 

Details of the agreement

According to the definitive merger agreement, CMC shareholders will get 0,406 common stock Entegris shares and $133 in cash per share. The per-share consideration price represents about 35% over the closing price of CMC Materials on Dec 14, 2021. 

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Entegris stockholders will own roughly 91% of the company, while CMC shareholders will control approximately 9%.

CMC Materials Inc is a top-in-class provider of the advanced materials used in the semiconductor space. The addition of this company’s CMP portfolio will help expand Entegris’ world-class solutions set, which will help the company develop comprehensive electronic materials offerings. 

The complementary nature of CMC’s tech platforms will allow Entegris to provide the world a wider array of high-value and innovative options at a much faster rate. 

These enhanced process and materials options for these advanced manufacturing scenarios will help clientele improve performance, productivity, and overall cost of ownership.

How does top management feel?

Entegris’ Chief Executive Officer and President, Bertrand Loy, said:

Acquiring CMC Materials will further differentiate our unit-driven platform and advance our ability to provide a broad range of process solutions for our customers, at a faster time-to-solution.

The CEO claimed the combined portfolio would help create the most innovative and comprehensive electronic materials offering in the industry. In addition, he said that he believes the deal will allow them to unlock substantial growth and profitability via enhanced execution, sale, and innovation. 

The CEO said they also intend to use their significant cash flow to reduce leverage quickly. As a result, he claims that they’re confident they’ll be poised to provide significant value to their shareholders, colleagues and customers. 

Strategic financial benefits

The acquisition will allow Entegris to provide its customers and shareholders with a compelling value proposition via its enhanced operating capabilities and its broadened portfolio of world-class solutions. 

It will also be able to accelerate its innovation capabilities because of an expanded IP portfolio and greater R&D scale.