The official announcement comes one day after the Wall Street Journal reported that the two firms were nearing a deal.
Under the agreement terms, Versum stockholders would receive 1.120 shares of Entegris for each existing VSM share.
“The combined company will have a pro forma enterprise value of approximately $9 billion, based on the closing prices of Entegris and Versum Materials on January 25, 2019, and approximately $3 billion in revenue and approximately $1 billion in Adjusted EBITDA on a pro forma basis for calendar year 2018,” read the official statement of the merger.
‘MORE VALUE TO STOCKHOLDERS’
The headquarters of the combined company would be Billerica, Massachusetts. However, it would still maintain a strong operational presence in Tempe, Arizona.
Once the deal is done, Entegris CEO Bertrand Loy would be the combined Chief Executive Officer and Entegris CFO Greg Graves would serve as combined Chief Financial Officer, while Versum Materials General Counsel Michael Valente will serve as General Counsel of the combined company.
Entegris CEO Bertrand Loy weighed in, “We are excited to combine with Versum Materials to create a premier specialty materials company for the semiconductor and other high-tech industries.”
Versum Materials CEO Guillermo Novo chipped in, “This merger will create greater benefits and growth opportunities than either company could have achieved on its own. It dramatically accelerates our goal of portfolio diversification – creating an end-to-end materials solutions provider across the entire semiconductor manufacturing process.”
The combined entity is expected to generate more than $75 million of annual cost synergies in manufacturing, logistics, procurement, and SG&A rationalization within 12 months after the close of the deal.
Both VSM and ENTG stocks surged in morning trade, with Versum recording an 11.8% spike.