8-KMaterial AgreementsRegulation FDExhibits & Filings

LAM RESEARCH CORP 8-K Report, Material Agreement (Oct 10, 2006)

Filed October 10, 2006For Securities:LRCX

Summary

Lam Research Corporation (LRCX) announced a significant strategic acquisition through an Asset Purchase Agreement with Bullen Ultrasonics, Inc., for $175 million in cash. This acquisition focuses on Bullen's silicon growing and silicon fabrication assets, which represent a core business for Lam as they are currently its largest customer for these operations. The deal, which includes assets in both the U.S. (Eaton, Ohio) and China (Suzhou), is expected to enhance Lam's vertical integration capabilities and secure critical supply chain elements. Bullen Ultrasonics will continue to operate its other unrelated businesses independently. The transaction is subject to customary closing conditions, with the U.S. portion expected to close within 30-45 days of the agreement date. A portion of the purchase price will be held in escrow to cover indemnification obligations. This move signals Lam's commitment to expanding its operational control and expertise in key manufacturing processes within the semiconductor equipment sector.

Key Highlights

  • 1Lam Research to acquire silicon growing and fabrication assets from Bullen Ultrasonics for $175 million in cash.
  • 2Acquisition includes Bullen's U.S. (Eaton, Ohio) and China (Suzhou) silicon-related assets, intellectual property, equipment, and inventory.
  • 3Bullen Ultrasonics' silicon business is Lam's largest customer, indicating strong strategic rationale for vertical integration.
  • 4Bullen Ultrasonics will retain and continue its unrelated businesses as a separate entity.
  • 5Transaction is subject to customary closing conditions; U.S. closing expected within 30-45 days.
  • 6A portion of the purchase price ($17.5 million) will be held in escrow for 12 months to secure indemnification.
  • 7The acquisition aims to enhance Lam's control over key manufacturing processes and supply chain.

Frequently Asked Questions

The primary purpose of this acquisition is for Lam Research to gain control over critical silicon growing and fabrication assets that are essential to its operations. As Bullen Ultrasonics' silicon business is Lam's largest customer, this move allows for vertical integration, enhanced supply chain security, and deeper expertise in key manufacturing processes.

The total purchase price for the silicon growing and silicon fabrication assets is $175 million in cash. A portion of this, $2.5 million, will be allocated to the Suzhou assets at their closing. Additionally, $17.5 million of the total consideration will be placed in escrow for 12 months following the closing date to secure indemnification obligations of Bullen Ultrasonics.

Bullen Ultrasonics will retain all assets unrelated to the silicon growing and silicon fabrication business. The company will continue to operate these other businesses as a separate, independent entity.

The closing of the U.S.-based assets is expected to occur approximately 30 to 45 days after the agreement date (October 5, 2006), subject to the satisfaction of customary closing conditions. The closing of the Suzhou assets will occur within 5 business days following receipt of all necessary governmental approvals and satisfaction of other customary conditions.