SAN JOSE, Calif. - Seeking to narrow its focus, Veeco Instruments Inc. has agreed to sell its metrology business to Bruker Corp. for $229 million in cash.
The sale includes Veeco’s atomic force microscope (AFM) business in Santa Barbara, Calif. and its optical industrial metrology (OIM) business in Tucson, Ariz.. It also includes Veeco’s associated global AFM/OIM field sales and support organization.
An undisclosed number of employees from Veeco (Plainview, N.Y.) will move to Bruker. ''I can't give you the specific number at this time. But the vast majority of metrology factory employees and field support will move to Bruker. We will provide updated headcount information for Veeco at the closing of the transaction,'' according to a Veeco spokeswoman.
Bruker intends to combine Veeco's metrology unit with its Bruker Nano instruments business, which currently sells a broad range of systems and analytical solutions for materials and nanotechnology research.
The transaction has been approved by the board of both companies and is expected to close in the fourth quarter of 2010, pending regulatory review and subject to customary closing conditions.
Veeco currently expects cash proceeds from the transaction to be approximately $160 million net of estimated applicable taxes and transaction fees.
“Following the sale of metrology, Veeco expects to benefit from greater focus on and investment in our LED & Solar and Data Storage Process Equipment businesses,'' said John Peeler, Veeco’s chief executive, in a statement.
Thanks to the LED boom, Veeco recently posted record quarterly results. Second quarter revenue was $253 million, a new record for Veeco. This was an increase of approximately 250 percent from last year and 55 percent sequentially. Net income was $52.4 million, compared to a loss of $14.7 a year ago.
LED and solar revenues were $186 million, with approximately $175 million in MOCVD. The company shipped 81 MOCVD systems, quadrupling shipments since the third quarter of last year.
Veeco's third quarter 2010 revenue is currently forecasted to be between $290 and $315 million. Earnings per share are currently forecasted to be between $1.55 to $1.82 on a GAAP basis and $1.23 to $1.43 on a non-GAAP basis.
Veeco and Aixtron are seeing huge demand for MOCVD tools for LED applications. Another tool vendor, Applied Materials Inc., is planning to enter the MOCVD fray. Now, however, there is a slowdown in one of the hottest markets to date: LEDs, according to analysts.
Most of the metrology world critical in micro and nano device manufacture is less familiar to design engineers steeped in circuitry, but with the acquisition of DI in ~1998, Veeco had purchased the world's leader in nanoscale imaging metrology - based on scanning nano probe techniques.
DI was a bit rare in advanced world leading nanoscale imaging instrumentation, homegrown in Santa Barbara and lead by one of the best scientist businessman leader anywhere, Dr. Virgil Elings.
The origins of Veeco was not steeped in metrology, but by purchase of Wyko and especially Digital Instruments it became a world wide nanoscale metrology leader, not circuits EE metrology, but nanotechnology metrology ( a new market ).
DI lead the world in that and still does, although other firms have their specialties in AFM instruments, Veeco's AFM product lines are broadest in scope. Some of the best AFMs come from a firm founded by alumni of DI - Asylum Research also in Santa Barbara where DI is based.
Yet from a business decision, by choosing LED lighting markets over AFM nanoscale imaging for size and rate of growth is pretty obvious business wise, and focus on one's best opportunities is needed for capturing success.
So I'd say Veeco via Digital Instruments and Wyko to a lesser degree is/ was a leader in (nano) metrology - worldwide.
And yet is it a feather in Veeco's cap to have garnered a leading position to hopefully close up to 130 MOCVD system sales to China as the preferred factory machine ( poss $260m sales opportunity).
Quite telling, and yes Aixtron and some other MOCVD suppliers did not seem to come close in the bidding?
The improved gas distribution showerhead in the new Veeco MOCVDs seems to be a useful advance over poor irreproducible gas showerheads in MOCVDs of yore, and this is important to LED and laser yields and parametric distributions. Key advance.
Veeco - the history of the firm had thin film metrology initially from Sloan in Santa Barbara.
The roots of Veeco are in power supplies and leak detectors and vacuum coating from Sloan( of Santa Barbara). Veeco had developed inhouse, a workhorse gridded ion beam etching tool used most often in etching advanced compound semiconductors and some metal films that could not be gas plasma etched ( ie non volatile species ). IBM for one like Veeco's ion beam etch process equipment for many years likely even to this day for various unusual microelectronic and data storage processes.
Veeco went through a spate of acquisitions of various process equipment firms in disk drive related markets, buying CVC ( Consolidated Vacuum Corp - recently sputtering ), Ion Tech - a leader in ion beam sputter coatings for thin film DWDM optics, and systems for disk drive processing, and Commonwealth scientific, with comparable ion beam systems and a line of well respected component ion beam guns.
After that buying spree, Veeco went on to buy Wyko for interferometric optical imaging ( and metrology ) both of optical surfaces - smoothness and curvature measurments and MEMS and Hard Drive heads ( in microscope white light interferometery ). Wyko shared this market with Zygo and in disk drive head manufacture of thin film heads, interferometry was a key metrology technology used in manufacturing the thin film head structures ( and plated coils ).
After Wyko, Veeco acquired Digital Instruments (DI), a firm which had about 50% of world wide leading market share of Scanning Probe Microscopes - commonly referred to as AFMs Atomic Force Microscopes. Notably DI dominated the Japanese market for nanoscale AFM instruments. That was amazing, and a huge credit to Dr. Elings and his team.
To me, Veeco was never a star in metrology. They have finally found its niche--LEDs, solar and storage.
Here's my question: AMAT was looking to buy them at one time. Will AMAT buy Veeco to get into the MOCVD biz?
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