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Lam Research acquires Novellus Systems

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The combined enterprise will retain the name of Lam Research Corp.Under the terms of the agreement, Novellus stockholders will receive 1.125 shares of Lam Research common stock for each share of Novellus that they own, in a tax-free exchange. Based on the closing price of Lam’s stock on December 14, 2011, the transaction values Novellus at a price of $44.42 per common share. Upon closing, Lam and Novellus stockholders will own approximately 59 percent and 41 percent, respectively, of the combined company.Lam’s $1.6 billion stock repurchase program will be funded from the combined company’s existing on-shore cash and on-shore cash generation. Assuming completion of the stock repurchase program, this will essentially result in a total financial impact on the company as if the deal were structured with approximately 48 percent cash.”This strategic combination positions Lam Research to lead the development of next-generation semiconductor manufacturing technology and productivity solutions at a time when growing semiconductor demand and increased device complexity are creating significant business opportunities,” said Steve Newberry, vice chairman and chief executive officer of Lam Research.Richard Hill, chairman and chief executive officer of Novellus, said, “We believe the combination of Lam and Novellus is great news for our customers, investors and employees. The complementary skills, technologies and product offerings of Lam and Novellus will create a strong platform for delivering innovative and cost-effective solutions. For our investors, it presents an ability to participate in the combined company’s future value creation potential.”Martin Anstice, who, as previously announced, will assume the position of CEO of Lam Research from Steve Newberry effective January 1, 2012, will continue as CEO following the close of the transaction. He is currently Lam’s president and chief operating officer. Timothy Archer, chief operating officer of Novellus, will become chief operating officer of the combined company; and Ernest Maddock, chief financial officer of Lam, will remain chief financial officer. The board of directors of Lam will add four new directors jointly nominated by Lam and Novellus.The closing of the transaction is subject to customary conditions, including approval by Lam’s and Novellus’s stockholders and review by U.S. and international regulators. The companies expect the transaction, which has been unanimously approved by both Lam’s and Novellus’s boards of directors, to close in the second calendar quarter of 2012.


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