Mks Inc. · NASDAQ:MKSI
Mks — MKS Instruments — Merger or Acquisition (July 2021)
23 slides from Mks's merger presentation, Jul 8, 2021
Slide 1: Optimizing the Interconnect: MKS To Acquire Atotech
Optimizing the Interconnect: The Next Frontier For Miniaturization & Complexity MKS To Acquire Atotech July 1, 2021 (updated July 8, 2021) 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 (the “transaction”) between MKS Instruments, Inc. (“MKS”) and Atotech Limited (“Atotech”), the expected timetable for completing the transaction, future financial and operating results and m
Slide 3: Additional Information; No Offer or Solicitation
Additional Information; No Offer or Solicitation Additional Information and Where to Find It This communication does not constitute a solicitation of any vote or approval. In connection with the proposed transaction, Atotech plans to provide to its shareholders a circular containing information on t
Slide 4: Financial Information; Use of Non-GAAP Financial Measures
Financial Information; Use of Non-GAAP Financial Measures Financial Information; Presentation of Combined Information Except as otherwise indicated, all financial information of MKS has been reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all financial informat
Slide 5: MKS: Years of Leadership in Enabling Miniaturization
MKS: 60 Years of Leadership in Enabling Miniaturization The Next Frontier in Miniaturization and Complexity is the Interconnection of chips, sensors, and devices Broadens MKS’ capabilities in Advanced Markets Atotech is a global leader in electronics chemistry Positions MKS to accelerate customer ro
Slide 6: Chemistry Is Critical Enabler in the Markets MKS Serves
Chemistry Is Critical Enabler in the Markets MKS Serves Semiconductor Advanced Markets MINIATURIZATION / FORM-FACTOR COMPLEXITY CHEMISTRY Smaller Geometries (nm) Vertical Scaling Novel Materials Finer Features (µm) Higher Density Novel Materials MINIATURIZATION CHEMISTRY Surround the Chamber® Surrou
Slide 7: Atotech: A Leading Chemistry Solutions Provider
Atotech: A Leading Chemistry Solutions Provider Electronics PCBs, semiconductor IC packaging Equipment & consumables model creates sticky business Consumables business CAGR 4% - 6%[1] General Metal Finishing (GMF) Decorative & functional surface finishing applications Stable, cash generative busines
Slide 8: Challenges at the Interconnect Demand Integrated Approach
Challenges at the Interconnect Demand Integrated Approach Increased device complexity driving PCB and Packaging innovation Increasing density, shrinking geometries Interconnect quality is essential to integration of chips to devices Reliability, productivity and peak performance are critical Optimiz
Slide 9: Complete Via Formation Process – Unique to the Industry
Complete Via Formation Process – Unique to the Industry PHOTO PROCESS PRESSING LAMINATION VIA FORMATION & PLATING PROCESS FLOW VIA FORMATION & PLATING OXIDE BLACKENING LASER DRILLING DESMEAR E-LESS CU FLASH Cu PLATING VIA FILLING ATOTECH MKS SPLASH REMOVAL Optimize laser absorption for quality & pro
Slide 10: Complete Via Formation Workflow – Unique to the Industry
Complete Via Formation Workflow – Unique to the Industry PHOTO PROCESS PRESSING LAMINATION VIA FORMATION & PLATING PROCESS FLOW
Slide 11: Unique Domain Expertise In PCB and Packaging
HIGH LOW COMPLEXITY LEVEL LARGER SMALLER VIA SIZE Wafer RDL ATOTECH EQUIPMENT & MATERIALS MKS LASER SYSTEMS Unique Domain Expertise In PCB and Packaging …. Ability to optimize chemistry and equipment together will be a key differentiator IC Packaging Advanced PCB (HDI, Flex, SLP) Multilayer PCB
Slide 12: MKS + Atotech ~$4B Combined SAM
MKS + Atotech ~$4B[1] (2020) PCB Laser Drilling + Chemical Processing SAM …. Creates Attractive Share Gain Opportunity Share Gain Opportunity in Combined SAM Growing 3-5% Annually[2] [2] MKS internal estimates. Refers to 2021-2025 CAGR [1] MKS internal estimates
Slide 13: L-T Opportunity: Leverage Combined Via Formation Expertise
L-T Opportunity: Leverage Combined Via Formation Expertise TODAY Atotech leadership in HDI chemistry FUTURE MKS ATOTECH Solving Customers’ Hardest Challenges Through Optimization, Collaboration & Differentiation Cross-Selling Opportunities Integrated via Formation Architectures Growing miniaturizati
Slide 14: Transaction Financial Overview
Transaction Financial Overview
Slide 15: Stronger Financial Profile
Stronger Financial Profile Atotech brings robust operating profile Adjusted Gross margin >50%[1]; Adjusted EBITDA margin of >25%[1] Attractive recurring consumables revenue stream Equipment + Consumables provides sticky/stable business Non-GAAP EPS expected to be accretive within first year Estimate
Slide 16: Stable Revenue Stream With Strong Profitability
Stable Revenue Stream With Strong Profitability Combined Consumables + Services Revenue Makes Up ~40% of Pro Forma Revenue Mix [1] Pro forma LTM 3/31/2021 results including acquisition of Photon Control, expected to close in Q3 2021. [2] LTM 3/31/21 results. Reported Adjusted Gross Margin, Adjusted
Slide 17: Manageable Leverage With Strong Cash Generation Profile
Manageable Leverage With Strong Cash Generation Profile Pro Forma Capitalization Cash $800M Revolver ($500M) $-- Gross Debt $5.3B Net Debt $4.5B Expected Debt / Adj. EBITDA at closing[1] < 4.0x Expected Net Debt / Adj. EBITDA at closing[1] < 3.5x [1] Based on internal MKS estimate of pro forma Adjus
Slide 18: Transaction Summary
Transaction Summary Per Share Consideration $16.20 per share in cash and 0.0552 MKS shares per Atotech share Transaction Consideration Equity value of $5.1B and estimated enterprise value of $6.5B Synergies and EPS Impact Estimated $50M within 18 - 36 months Expected to be accretive to Non-GAAP EPS
Slide 19: Uniquely Positioned to Optimize the Interconnect
Uniquely Positioned to Optimize the Interconnect Devices are getting smaller and more complex Next frontier in advanced electronics is optimizing the interconnect Combined company positioned to drive the next-gen advanced electronics roadmaps Expertise in lasers, optics, motion and chemistry to offe
Slide 20: Q&A
Q&A
Slide 21: Appendix: GAAP to Non-GAAP Reconciliations
Appendix: GAAP to Non-GAAP Reconciliations
Slide 22: Financial Reconciliations
Financial Reconciliations Reported IFRS gross profit, Adjusted EBITDA and Adjusted EBITDA Margin include adjustments to align with U.S. GAAP reporting. Note 1: Atotech does not include depreciation expense and certain logistics costs in Adjusted GM. Depreciation expense of $14M and logistics costs o
Slide 23: Financial Reconciliations
Financial Reconciliations Photon Control amounts converted to USD using a fixed CAD/USD exchange rate of 0.80 Reported IFRS gross profit, Adjusted EBITDA and Adjusted EBITDA Margin include adjustments to align with U.S. GAAP reporting. Note 1: Atotech does not include depreciation expense and certai