Semitool Becomes Part of Applied Materials (SMTL, AMAT)

Semitool, Inc. (NASDAQ: SMTL) has become the perfect fit for Applied Materials, Inc. (NASDAQ: AMAT).  Applied has decided to acquire the maker of multi-chamber single-wafer and batch wet chemical processing equipment used in the fabrication of semiconductor devices. The company is being acquired by Applied Materials for $11.00 per share in cash.  The $364 million deal is small enough that it should not bleed too much from Applied Materials’ shares as its market cap is some $17 billion and now that it has earnings behind it.

With Semitool’s earnings just last night, the company offered guidance that can be interpolated to Applied Materials.  Shipments for the coming quarter are expected to range from $47 million to $50 million; and management expects to report revenue in a range of between $190 million to $210 million for fiscal-2010.

As far as how this relates to Applied Materials, analysts according to Thomson Reuters are looking for revenues of $7.18 billion for its fiscal year-end October-2010.  In short, this is a bolt-on or tool chest acquisition.

JON C. OGG