– Ham-Let customers include semiconductor equipment manufacturers and chip makers
– The acquisition expands UCT’s addressable market in semiconductors
– Ham-Let increases UCT’s vertical capabilities and adds high value, high gross margin product offerings
HAYWARD, Calif., March 31, 2021 /PRNewswire/ — Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today announced it has completed the acquisition of Ham-Let (Israel-Canada) Ltd. (“Ham-Let”) for approximately $351 million, in a transaction which includes $284 million of equity value plus $67 million of net debt.
“The timing of this acquisition is ideal as growing semiconductor demand and increased device complexity are creating significant business opportunity,” said Jim Scholhamer, CEO. “The addition of Ham-Let’s high value, process instrumentation and flow control systems to our current set of offerings adds even more value to, and deepens our partnerships with our customers as we work together to solve the challenges of today’s semiconductor industry. The combination of these products and capabilities will provide an excellent growth platform.”
Under the terms of the agreement, the total transaction value is approximately $351 million and is being structured as an all-cash transaction. UCT anticipates the acquisition to be accretive to shareholders on an adjusted basis within the first year after close.
As of December 25, 2020 for UCT, and December 31, 2020 for Ham-Let, pro forma combined LTM revenue was $1.6 billion, operating income was $172.3 million and Adjusted EBITDA was $204.9 million.
Barclays acted as Sole Lead Arranger and Bookrunner on the Term Loan B offering, Meitar Law Offices (Israel) served as UCT’s lead legal advisor with the assistance of Davis Polk and Wardwell LLP. Needham and Co. provided a fairness opinion to UCT. Naschitz, Brandes, Amir Law Offices served as legal advisor to Ham-Let and PricewaterhouseCoopers provided a fairness opinion.
About Ultra Clean Holdings, Inc.
Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, components and parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. Under its Products division, UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping, and high-precision manufacturing. Under its Services Division, UCT offers its customers tool chamber parts cleaning and coating, as well as micro-contamination analytical services. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.
About Ham-Let (Israel-Canada) Ltd.
Ham-Let Group is one of the world’s leading companies in development, manufacturing, and distribution of industrial flow control systems – connectors, fittings and valves for high pressure and high temperatures transmission systems (gases and liquids). Founded in 1950, Ham-Let Group serves customers in a wide range of segments: semiconductor, power generation, chemical, oil & gas, petrochemical, high purity, and more. Ham-Let factories are equipped with the latest manufacturing and inspection technologies enabling precise solutions for industry opportunities, and encouraging innovation for the creation of new, advanced components and systems. Ham-let has a strong global presence with 14 branches, 5 manufacturing sites and a worldwide distribution network.
Use of Non-GAAP Measures
This release and the accompanying tables include a discussion of Pro Forma Adjusted EBITDA for UCT and Ham-Let, which is a non-GAAP financial measure that is provided as a complement to results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We define “Adjusted EBITDA” as net income (loss) plus provision for (benefit from) taxes, interest and other expense (income), depreciation expense, amortization expense, stock-based compensation expense, restructuring charges and other infrequent or unusual items.
Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, the definition of Adjusted EBITDA used in this press release may not be comparable to the definitions as reported by other companies.
We believe Adjusted EBITDA is relevant and useful information because it provides UCT and investors with additional measurements to analyze past operating performance and enterprise value. The unaudited Pro Forma Adjusted EBITDA financial information is not necessarily indicative of the results of income in future periods or the results that actually would have been realized had UCT and Ham-Let been a combined company during the specified period.
A reconciliation of Net income to pro forma-adjusted EBITDA is provided in the accompanying table.