AURORA, Ill.--(BUSINESS WIRE)--June 15, 2006--Cabot
Microelectronics Corporation (NASDAQ:CCMP), the world's leading
supplier of chemical mechanical planarization (CMP) polishing slurries
to the semiconductor industry, announced today that it has entered
into agreements to purchase substantially all of the assets of QED
Technologies, Inc. (QED) and certain associated proprietary technology
and intellectual property. QED is a privately-held company that
specializes in unique, patented polishing and metrology systems for
high precision optics. This acquisition is a further step in the
execution of Cabot Microelectronics' Engineered Surface Finishes (ESF)
growth initiative. Through the ESF initiative, the company seeks to
leverage its expertise in CMP formulation, materials and polishing
techniques for the semiconductor industry to address other demanding
market applications requiring nanoscale control of surface shape and
finish.
Established in 1996, QED is best known for Magneto-Rheological
Finishing (MRF(R)), its proprietary surface figuring and finishing
technology. MRF outperforms traditional finishing technologies and has
the unique ability to predictively improve both figure and surface
finish simultaneously. With more than 100 systems in operation
worldwide, MRF is widely acknowledged as the best-in-class technology
for final figuring of the highest precision optics.
As a natural complement to MRF, QED has also recently
commercialized its proprietary metrology technology, Subaperture
Stitching Interferometry (SSI(R)). Interferometers, which measure the
surface of an optic, traditionally are limited by the size and
precision of the reference optic used. SSI is designed to remove those
barriers, giving the user an accurate, complete map of the optical
surface. This map is needed to produce the highest precision optics to
the most exacting tolerances. Upcoming products are expected to extend
SSI to include aspheres and freeform shapes. In combination with MRF,
SSI enables the transition from time-consuming, costly,
labor-intensive processes to repeatable, efficient automation in
producing precision optical surfaces.
"We believe the precision optics industry and QED Technologies
provide excellent vehicles for us to leverage our capabilities and
expand into new markets under our ESF initiative," stated William P.
Noglows, Chairman and CEO of Cabot Microelectronics. "The pervasive
and growing precision optics market is placing increasing value on
high quality surface finishes and high precision form factors. The
industry has clearly articulated, unmet needs involving complex
geometries, unique materials and pristine surface finish requirements.
Supporting end markets and applications such as semiconductor
lithography and inspection, defense and aerospace imaging, industrial
lasers and professional and consumer imaging, this industry is in
transition from traditional, artisan methods to automated, repeatable
and reliable processes. QED provides us with a platform of unique
polishing and metrology technologies and products, commercial entry
into the precision optics market and an outstanding team of
scientists, engineers and associates. We believe combining QED's
business with our expertise in CMP will form a strong foundation for
growth. We expect that the QED business will leverage CMC's expertise
in polishing chemistry to enhance the development of MRF consumables,
and that our global infrastructure will accelerate QED's entry into
new markets."
"We are pleased to be joining a company that shares our passion
for technological innovation and surpassing customer needs," stated
Don Golini, President of QED. "Just as CMP is an enabling technology
for the semiconductor industry, we believe our patented processes
allow precision optics manufacturers to achieve greater performance
and improved efficiency. We believe that combining the complementary
strengths of QED and Cabot Microelectronics will present new and
exciting solutions for the precision optics market, as well as new
opportunities for the growth of our products and services."
The purchase price for the acquired assets is between $19 and
$23.5 million, with the exact amount dependent upon the performance of
the QED business over the two years following the closing of the
transaction, which is expected to occur in July 2006. The purchase
price will be paid in cash from Cabot Microelectronics' available
reserves. In conjunction with the transaction, Cabot Microelectronics
will assume approximately $2 million of current liabilities of QED.
QED is presently a profitable business and generated revenue in
the last calendar year of about $12 million. Cabot Microelectronics
expects the effect of the acquisition to be mildly dilutive to its
earnings per share over the next two years due to integration costs
and the impact of amortizing the cost of acquired intangible assets,
and accretive thereafter. The company currently expects to record a
pre-tax charge of approximately $2 million in its fourth fiscal
quarter, ending September 30, 2006, due to the write off of
"in-process" research and development activities, as required by
accounting rules.
ABOUT CABOT MICROELECTRONICS CORPORATION
Cabot Microelectronics Corporation, headquartered in Aurora,
Illinois, is the world's leading supplier of CMP slurries used in
semiconductor and data storage manufacturing. The company's products
play a critical role in the production of the most advanced
semiconductor devices, enabling the manufacture of smaller, faster and
more complex devices by its customers. Since becoming an independent
public company in 2000, the company has grown to approximately 650
employees who work at research and development labs, sales and
business offices, manufacturing facilities and customer service
centers in China, France, Germany, Japan, Singapore, South Korea,
Taiwan, the United Kingdom and the United States. In addition to its
core CMP business, the company's vision looks beyond the semiconductor
industry to become the world leader in shaping, enabling and enhancing
the performance of surfaces. For more information about Cabot
Microelectronics Corporation, visit www.cabotcmp.com or contact
Barbara Ven Horst, Director of Investor Relations at (630) 375-5412.
Additional information about the company's Engineered Surface Finishes
initiative can be found at www.ensurfin.com.
ABOUT QED TECHNOLOGIES, INC.
QED Technologies, Inc., based in Rochester, New York and with
operations also in Japan, Europe and Australia, is the pioneer and
exclusive provider of Magneto-Rheological Finishing (MRF(R)) and
Subaperture Stitching Interferometry (SSI(R)) technologies for the
precision optics industry. MRF(R) combines magnetic fluids with
sophisticated computer programs and computer controlled machines to
create a patented process that deterministically improves both shape
and surface accuracy simultaneously. SSI(R) improves the capacity and
accuracy of a standard interferometer by measuring subsets of an
optical surface and "stitching" those measurements together, creating
a map of the entire surface automatically. QED is dedicated to
providing revolutionary solutions that enable or significantly enhance
capabilities and positively impact the bottom line. Additional
information can be found at www.qedmrf.com.
SAFE HARBOR STATEMENT
This news release may include statements that constitute "forward
looking statements" within the meaning of federal securities
regulations. These forward-looking statements include statements
related to future sales and operating results, company and industry
growth and trends, growth of the markets in which the company
participates, international events, product performance, new product
introductions, development of new products, technologies and markets,
the acquisition of or investment in other entities or assets,
including intellectual property, and the construction of new
facilities by Cabot Microelectronics Corporation. These
forward-looking statements involve a number of risks, uncertainties,
and other factors, including those described from time to time in
Cabot Microelectronics' filings with the Securities and Exchange
Commission (SEC), that could cause actual results to differ materially
from those described by these forward-looking statements. In
particular, see "Risk Factors" in Other Information in our quarterly
report on Form 10-Q for the quarter ended March 31, 2006, and "Risks
Relating to Our Business" in Management's Discussion and Analysis in
our annual report on Form 10-K for the fiscal year ended September 30,
2005, both filed with the SEC. Cabot Microelectronics Corporation
assumes no obligation to update this forward looking information.
CONTACT: Cabot Microelectronics Corporation
Barbara Ven Horst (Investor Relations), 630-375-5412
SOURCE: Cabot Microelectronics Corporation