Axcelis turns down revised bid from Sumitomo but opens door for future discussions

By Lisa Kerner

Charlotte, N.C., March 17 - Axcelis Technologies, Inc.'s board of directors unanimously rejected a revised and unsolicited proposal by Sumitomo Heavy Industries, Ltd. and its private equity partner, TPG, to acquire the company for $6.00 per share.

The proposal undervalues the company and is not in the best interests of Axcelis and its shareholders, Axcelis said in a news release.

"The board of directors' decision is supported by extensive valuation analyses and by our trading prices over the last year," Axcelis chairman and chief executive officer Mary G. Puma said in the release.

"Although Axcelis' recent trading prices, along with others' in the industry, have been depressed, the board believes the company is well positioned for the future and worth more than $6.00 per share," Puma added.

Lead director of Axcelis' board Stephen R. Hardis expressed confidence in the company's future, citing the company's "robust" product pipeline and "favorable customer reaction" to its Optima HD products.

Axcelis and Sumitomo, who each have a 50% stake in their Japanese joint venture SEN Corp., had been in discussions off and on since July 2006.

Puma said management has pursued ways to enable Axcelis and SEN to become a single company through operational agreements or an equity transfer.

Despite rejecting Sumitomo's offer, Axcelis said it is ready to meet with the company again to "determine if there is a mutually beneficial transaction to resolve the joint venture relationship" for both Axcelis shareholders and Sumitomo.

Axcelis was advised by Goldman, Sachs & Co.

In February, Axcelis unanimously rejected an unsolicited proposal by Sumitomo and TPG to acquire the company for $5.20 per share. At that time, Axcelis said the offer was "opportunistic" and ignored the value Sumitomo would obtain by acquiring full ownership of SEN, which licenses technology from Axcelis.

Sumitomo is an integrated manufacturer based in Tokyo.

Based in Beverly, Mass., Axcelis makes semiconductor manufacturing equipment.

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