MIAMI – Element Solutions has announced the acquisition of Kuprion, a developer of nano-copper technology for the semiconductor, circuit board and electronics assembly markets, as well as the termination of a distribution agreement with Entegris for its ViaForm electrochemical deposition products.
Kuprion's ActiveCopper technology addresses the effects of thermal expansion and offers superior performance and reliability in a host of growth applications, including electric vehicles, high frequency 5G networks, IC substrate manufacturing, advanced packaging, mission critical aerospace and defense systems, and datacenters. The acquisition has been structured with an upfront payment and potential earn-out payments based on milestones associated with product qualification and revenue over several years, Element said in a release.
Element Solutions has also agreed to pay $185 million, net of estimated cash tax benefits, to Entegris to terminate its distribution agreement for ViaForm electrochemical deposition products. The wafer level plating products for the semiconductor fabricators are currently developed and manufactured by MacDermid Alpha Electronics Solutions, a business unit of Element Solutions, and have been distributed by Entegris under an evergreen distribution agreement.
After a transition period, Element Solutions will manage all aspects of the ViaForm product line in-house. The payment will be funded by a combination of cash on hand and an incremental $150 million borrowing under the Company’s senior credit facility.
"These transactions deepen our relationships and capabilities in compelling, long-term growth markets propelled by the proliferation of high-performance computing supporting artificial intelligence, industrial automation, and other emerging applications," said President and CEO Benjamin Gliklich. "The current weakness in the electronics sector represents an attractive opportunity to invest and position ourselves for the inevitable recovery. Entegris has been a solid long-term partner distributing our ViaForm technology. Over time, however, we both agreed that unified responsibility of all aspects of the product cycle – from innovation and manufacturing through to sales and support – would be best for our customers and the growth of the product line. These products are integral to semiconductor production at the largest fabricators in the world and strengthen our relationships and value-proposition to this important supply chain. The transaction is revenue growth, margin, and CRI (Cash Return on Investment) accretive and should increase the contribution of our Electronics segment to the company’s annual adjusted EBITDA to over 70%. We thank Entegris and its legacy companies for their partnership over 20 years and for the strong commercial position they helped build. We look forward to providing an improved offering to our customers.
"Our acquisition of Kuprion brings another highly-differentiated capability to our portfolio together with the world-class R&D and applications team who developed it," Gliklich said. "Their technology is designed to solve the increasingly difficult challenges associated with thermal management and adhesion in leading-edge electronics. We believe this represents industry-changing technology with broad applications across our portfolio, from semiconductor packaging to IC substrate metallization and electronics assembly. Combining Kuprion’s solutions and technical capability, already sought after by many of our largest customers, with our breadth of sales, service and applications expertise will create tremendous growth opportunities."
