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.