Applied Materials news for Monday has AMAT stock up.
Applied Materials (NASDAQ:AMAT) says that it is planning to acquire Kokusai Electric for a total of $2.20 billion. This will have the company purchasing the business from investment firm KKR. AMAT will be funding the deal through a combination of balance sheet cash and a term loan facility.
According to a Applied Materials news release about the deal, Kokusai Electric will join the company as a part of its Semiconductor Products Group once the deal closes. Kokusai Electric will continue to operate out of its headquarters in Tokyo once the deal is complete.
“Kokusai Electric has a strong culture of innovation along with excellent customer relationships and serves fast-growing areas of the wafer fab equipment market,” Gary Dickerson, President and CEO of Applied Materials, said in a statement. “By bringing Kokusai Electric’s talented team into Applied, we believe we will accelerate innovation for customers and create significant value for our shareholders.”
The Applied Materials news also notes that the company is expecting the deal to be immediately accretive to its non-GAAP earnings per share at close. It also points out that it already has approval from its Board of Directors for the deal. It now just needs regulatory approval and to complete other customary closing conditions.
Applied Materials says that it is expecting the deal to acquire Kokusai Electric to close within 12 months.
AMAT stock was up 1% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.