Applied Materials CEO Mike Splinter on $4.9 Billion Varian Acquisition
Applied Materials' CEO Mike Splinter discussed the company's acquisition of Varian Semiconductor Equipment Associates for $4.9 billion, a 55 percent premium over Varian's closing price. The deal is expected to be 8 percent non-GAAP accretive and will allow Applied Materials to fill in its product line and grow the business faster. Splinter emphasized the importance of growth and profitability in the deal, with a target of $50 million to $60 million in synergies in the second year and beyond.
Key Takeaways:
- The acquisition is a strategic move for Applied Materials to fill in its product line and grow the business faster.
- The deal is expected to be 8 percent non-GAAP accretive, with a target of $50 million to $60 million in synergies in the second year and beyond.
- Mike Splinter, CEO of Applied Materials, emphasized the importance of growth and profitability in the deal.
- The acquisition is seen as a way for Applied Materials to capitalize on the "mobility revolution" and create new transistors that are more powerful and efficient.
- Applied Materials has been acquisitive in the past, with 13 deals in the last five years, and may pursue more deals in the future.
- The management team at Varian Semiconductor will stay in place, with the CEO and CFO remaining for six months and potentially beyond.
Statistics:
- $4.9 billion: the price of the acquisition
- 55 percent: the premium over Varian's closing price
- 8 percent: the expected non-GAAP accretion
- $50 million to $60 million: the target for synergies in the second year and beyond
- 13: the number of deals Applied Materials has made in the past five years
- $1.2 billion: the amount allocated for R&D projects in Applied Materials
Sources:
- Carol Massar, Bloomberg News Anchor
- Mike Splinter, CEO, Applied Materials
- Matt Miller, Bloomberg News Anchor
- Bloomberg Transcript, May 4, 2011
- Bloomberg TV
- Applied Materials website
- Varian Semiconductor Equipment Associates website