Woodbury, NY and Hillsboro, OR, July 16, 2002 -- Veeco Instruments Inc. and FEI Company have signed a definitive merger agreement to combine the companies into a leader in 3D metrology and process equipment. FEI will become a wholly owned subsidiary of Veeco, and Veeco will be renamed Veeco FEI Inc.
Pursuant to the agreement, unanimously approved by the Boards of Directors of both companies, FEI stockholders will receive 1.355 shares of Veeco common stock for each share of FEI they own. Based upon FEI's approximately 32 million diluted shares outstanding, the FEI stockholders will receive approximately 44 million Veeco FEI shares with a current value of approximately $1 billion. The merger, which will be accounted for using the purchase method, is intended to be tax-free to FEI stockholders, and is expected to close during the fourth quarter of 2002 following approval of each company's stockholders, certain regulatory approvals and other customary closing conditions.
The transaction is expected to be accretive to Veeco's current 2003 analyst consensus estimates on a pro-forma basis. The transaction is expected to be dilutive to Veeco on a GAAP basis when including the expected impact of purchase accounting on amortization expense, in-process R&D write-off, inventory capitalization and SAB 101 deferred revenue recognition. Veeco FEI management will provide further information on the expected impact of purchase accounting on the combined company's financial statements upon completion of the merger. Veeco and FEI managements currently anticipate operating synergies of approximately $8-10 million on an annualized basis resulting from integration of the companies' sales and support networks, supplier management, and manufacturing and administrative efficiencies.
Vahe A. Sarkissian, FEI's Chairman, President and Chief Executive Officer, will become Chairman of the Board and Chief Strategy Officer of Veeco FEI; Edward H. Braun, Veeco's Chairman, President and Chief Executive Officer, will remain Chief Executive Officer and President. Veeco FEI's Board of Directors will have 13 members, seven of whom are current members of Veeco's Board (including Mr. Braun), five of whom are current members of FEI's Board (including Mr. Sarkissian), and one of whom will be designated by Philips Business Electronics International B.V., a significant stockholder of FEI. John F. Rein, Jr., Veeco's Executive Vice President and Chief Financial Officer will retain his position as CFO of the combined company.
Veeco FEI's corporate headquarters will be located in Woodbury, NY, the current Veeco headquarters, and FEI's current headquarters in Hillsboro, Oregon will remain a significant facility for Veeco FEI as a center of research and development and manufacturing. Veeco FEI will have approximately 2,900 employees at its key facilities in North America, Europe, Japan and the Asia-Pacific region.
Each company expects to meet guidance provided for the second quarter of 2002. Veeco's previous guidance for the second quarter of 2002 was: revenues of between $75-80 million, bookings greater than $70 million, and pro-forma earnings per share approximating break-even (excluding amortization expense). FEI's previous guidance for the second quarter of 2002 was: revenues of approximately $80 million, bookings of approximately $75 million and cash earnings per share of approximately $0.15. Veeco and FEI are currently expected to report their second quarter results separately on July 29th.
Veeco, with 2001 revenues of $449 million, is a worldwide leader in process equipment and metrology tools for the telecommunications/ wireless, data storage, semiconductor and research markets. Manufacturing and engineering facilities are located in New York, California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the United States, Europe, Japan and Asia Pacific.
Additional information on Veeco can be found at www.veeco.com.
FEI, with 2001 revenues of $376 million, is the 3D innovator and leading supplier of Structural Process Management solutions to semiconductor, data storage, structural biology and industrial companies. FEI's industry leading Dual-Beam( and single column focused ion and electron beam products allow advanced three-dimensional metrology, device editing, trimming, and structural analysis for management of sub-micron structures. Headquartered in Hillsboro, Oregon, FEI has additional development and manufacturing operations located in Peabody, Massachusetts; Sunnyvale, California; Eindhoven, The Netherlands; and
Brno, Czech Republic.
Additional information on FEI can be found at www.feico.com.
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