Mks Inc. · NASDAQ:MKSI
Mks — MKS Instruments — Merger or Acquisition (November 2018)
31 slides from Mks's merger presentation, Nov 1, 2018
Slide 1: Town Hall with ESI Employees: MKS Overview and Update on Announced ESI Acquisition
Town Hall with ESI Employees MKS Overview and Update on Announced ESI Acquisition 1 November 2018 Exhibit 99.1
Slide 2: Safe Harbor for Forward Looking Statements
Safe Harbor for Forward Looking Statements Statements in this presentation regarding the proposed transaction between MKS Instruments, Inc. (“MKS”) and Electro Scientific Industries Inc. (“ESI”), the expected timetable for completing the transaction, future financial and operating results, benefits
Slide 3: Important Additional Information Will be Filed with the SEC
Important Additional Information Will be Filed with the SEC ESI plans to file with the SEC and mail to its stockholders a Proxy Statement in connection with the transaction. Additionally, MKS and ESI will file other relevant documents with the SEC in connection with the transaction. The Proxy Statem
Slide 4: Non-GAAP Measures
Non-GAAP Measures This presentation includes measures that are not in accordance with U.S. generally accepted accounting principles (“non-GAAP measures”). Non-GAAP measures exclude amortization of acquired intangible assets, asset impairments, costs associated with completed and announced acquisitio
Slide 5: Introductions
Introductions John Lee: President & COO Cathy Langtry: Senior Vice President of Human Resources Nate Armstrong: Senior Vice President of V&A Sales MKS CONFIDENTIAL
Slide 6: MKS: Our Story
MKS: Our Story 5,000+ EMPLOYEES WORLDWIDE 1961 MKS FOUNDED $1.9B 2017 REVENUE 1,500+ WORLDWIDE PATENTS $133M R&D INVESTMENT 750+ ENGINEERS & SCIENTISTS 60+ COUNTRIES WHERE WE SELL ~100% SEMI CHIPS MADE w/ MKS PRODUCTS #17 FORTUNE 100 FASTEST GROWING MKS CONFIDENTIAL
Slide 7: Five Decades of Profitable Growth
Five Decades of Profitable Growth -Accelerate organic growth -Semi expansion -Continued M&A 1980’s 1970’s 1990’s 2000’s 2010 2012 2014 2016 2018+ -Strategic growth -SAM expansion -M&A -Sustainable and profitable growth -Strategic planning -Technical localization -End user champions -Q&R -Targeted M&
Slide 8: Enabling Technology for 50+ Years
Enabling Technology for 50+ Years 1990 $67M 2017 $1.9B 2010 $853M 2000 $327M 1980 $12M 1970 $3M 2018+ $$$B sustainable & profitable growth Well positioned for by solving complex problems MKS Confidential
Slide 9: Our Focus: Technology-Intensive Markets
Our Focus: Technology-Intensive Markets MKS CONFIDENTIAL LIFE & HEALTH SCIENCES Analytical & Medical Instrumentation Bio-Pharmaceutical Medical & Bioimaging Medical Devices Ophthalmic Surgery INDUSTRIAL TECHNOLOGIES Electronic Thin Film Industrial Manufacturing Electronic Component Manufacturing Pro
Slide 10: In All Areas of Our Business: MKS Business Process
IN ALL AREAS OF Our Business MKS Business Process MKS CONFIDENTIAL Established Profit & Cash Recovery Team Streamlined Operations and Administrative functions Optimized Sales channels CONTINUOUS IMPROVEMENT Active portfolio management Executing M&A strategy Aligning resources to support growth STRAT
Slide 11: Extended Leadership in the Semiconductor Market
Extended Leadership in the Semiconductor Market MKS CONFIDENTIAL LITHOGRAPHY & INSPECTION DEPOSITION, ETCH & CLEAN FRONT END PACKAGING & INSPECTION BACK END
Slide 12: Q3 2018 Financial Highlights
Q3 2018 Financial Highlights MKS CONFIDENTIAL Revenue of $487 million, in line with Q3 2017 L&M revenue: $201 million V&A revenue: $286 million Non-GAAP net earnings of $103 million, a 20% increase from Q3 2017 Revenue for Semiconductor customers were down 8% from Q3 2017, primarily due to the moder
Slide 13: Delivering Sustainable and Profitable Growth
Delivering Sustainable and Profitable Growth MKS CONFIDENTIAL REVENUE NON-GAAP NET EARNINGS PER SHARE 3X 6X $M
Slide 14: Vacuum & Analysis Division: Product Portfolio
Vacuum & Analysis Division: Product Portfolio Pressure/Vacuum Measurement, Flow/Gas Delivery & Valves Pressure/Vacuum Measurement Baratron® Direct & Indirect Pressure/Vacuum Gauges Heaters, Traps, Effluent Management Flow/Gas Delivery Mass Flow Controllers & Meters In-situ Flow Verifiers Flow Ratio
Slide 15: Successful Newport Acquisition
Successful Newport Acquisition Acquisition closed April 2016 Great synergy between the two companies Cross-selling to each other’s customers Technology sharing and leveraging best practices and know-how Grew share in the laser and photonics markets Improved financials for legacy Newport businesses M
Slide 16: Light & Motion Division: Product Portfolio
Light & Motion Division: Product Portfolio Opto-mechanics, Optics, Motion Control & Light Analysis Opto-mechanics, Optics & Optical Tables Optical Tables & Workstations Lenses, Mirrors, Filters & Beam Splitters Gratings Windows, Prisms & Fiber Optics Motion Control Stages Hexapods Motion Controllers
Slide 17: Recent Industry-Leading Honors for MKS
Recent Industry-Leading Honors for MKS MKS PROPRIETARY MKS RANKS #17 in 2018 as a top performer for a 2nd year, ranking #1 in Biggest Jumps, moving from #89 to #17 MKS RANKS #89 as a newcomer to this prestigious list in 2017, joining ranks with Amazon, Facebook, Lam and Microsemi LASER INDUSTRY CONT
Slide 18: MKS to Acquire Electro Scientific Industries (ESI)
MKS to Acquire Electro Scientific Industries (ESI) MKS CONFIDENTIAL EXECUTING ON A Key Strategy for MKS Acquiring a market leading technology company that serves common markets with complementary customer solutions Expands Industrial segments of PCB, Electronic Thin Film, and Electronic Component ma
Slide 19: Advancing Our Strategy
Advancing Our Strategy EXTEND and differentiate leadership in the use of UV lasers for advanced manufacturing DRIVE opportunities within both the Systems and Component businesses COMBINE applications knowledge (beam / Workpiece) with systems and technologies ACCELERATE pursuit of additional Industri
Slide 20: Laser Materials Processing Drivers
High throughput processing High quality machining Cost of ownership Laser Materials Processing Drivers MKS CONFIDENTIAL Application Challenges MKS Capabilities MKS Solutions Proprietary optical coatings Advanced controls and electronics Deep applications expertise Programmable laser pulsing Ultravio
Slide 21: Complementary Technology Leaders
Complementary Technology Leaders MKS CONFIDENTIAL Founded 1944 Headquarters in Portland, OR CY 2017 Revenue of $304M 600+ Employees* 1,000+ Global Patents* R&D Spending ~$35M R&D Headcount ~140+* Leadership in • Laser-based process equipment – Advanced PCB processing – Semi manufacturing – Component
Slide 22: Benefits for Key Stakeholders
Benefits for Key Stakeholders MKS CONFIDENTIAL CUSTOMERS INVESTORS EMPLOYEES $ Stronger technology base Improved product roadmaps Enhanced technology innovation Strong solution provider Diverse and growing end markets Enhance scale and profitability Best in class financial model Strong cashflow Care
Slide 23: Balanced and Diversified End Markets
Balanced and Diversified End Markets MKS CONFIDENTIAL Semi Industrial LHS Research & Defense $2.2B $1.9B MKSI by End Market in CY2017 Pro Forma Combined in CY2017
Slide 24: Strengthens Advanced Market Growth
Strengthens Advanced Market Growth MKS CONFIDENTIAL MKSI by End Market in CY2017 Pro Forma Combined in CY2017 * Revenue is combined CY17 data from MKSI and ESI ADVANCED MARKETS $820M SEMI SEMI 34% increase in Advanced Market revenue ADVANCED MARKETS $1.1B
Slide 25: It May Take a Few Months for the Acquisition to Close
It May Take a Few Months for the Acquisition to Close Please note that the acquisition is not yet complete The transaction is subject to customary closing conditions, including regulatory approvals and approval by ESI’s shareholders, and is expected to close in the first quarter of 2019 MKS and ESI
Slide 26: MKS and ESI
MKS and ESI MKS CONFIDENTIAL UV and ultrafast lasers Motion, photonics and optics RF power and plasma Vacuum processing; precise control of pressure, flow and composition Laser-based process equipment Advanced PCB processing Semi manufacturing Component manufacturing
Slide 27: eemks
eemks
Slide 28: Backup
BACKUP
Slide 29: Senior Executive Organization
Senior Executive Organization MKS CONFIDENTIAL Gerald G. Colella Chief Executive Officer John T.C. Lee President and Chief Operating Officer Catherine M. Langtry Senior Vice President Global Human Resources John F. Ippolito Senior Vice President Strategic Development Seth H. Bagshaw Senior Vice Pres
Slide 30: Significant Potential Growth Opportunities
Significant Potential Growth Opportunities MKS CONFIDENTIAL PRINTED CIRCUIT BOARDS $1.0B INDUSTRIAL MACHINING $1.0B MARKING ENGRAVING FINE METAL DRILLING EXPANDS MKS SAM BY $2.2B WAFER MARKING WAFER SCRIBING/DICING WAFER TRIM FLEX PCB VIA DRILLING HDI PCB VIA DRILLING IC PACKAGING VIA DRILLING MLCC
Slide 31: Transaction Overview
Transaction Overview MKS CONFIDENTIAL Per Share Consideration $30.00, all cash transaction Transaction Consideration $1.0B equity value Synergies and EPS Impact $15M within 18-36 months Accretive to Non-GAAP EPS and free cashflow in first 12 months after closing Pro Forma Capitalization (as if the t
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