One year ago today, I was sitting with David Butler and Kevin Crofton, of SPTS, at the company headquarters in Newport, Wales, talking about the whirlwind year they’d just had, how well the company was doing since the merger of STS and Aviza, and the advantages of being part of the Sumitomo Precision Product family.
The acquisition of Aviza by Sumitomo Precision Products had saved the company from near bankruptcy, and while Crofton and Butler were pleased with the outcome of the merger with STS, it had initially been their hope to aquire Aviza in a management buyout. So when I heard the latest news of the management buyout of SPTS from SPP just prior to SEMICON West 2011, I was eager to meet with them again to offer my congratulations and get the full story. My opportunity came during SEMICON West, when I interviewed Dave Thomas, marketing director, Etch Products, SPTS.
In retrospect, the way things unfolded turned out to be a lot better for those involved. Thomas noted that had the originally planned management buyout of Aviza gone through, they would have been in a much weaker position in the market. SPP provided credibility and backing, and the end result was a stronger, healthier, better positioned company.
However, now that SPTS has experienced significant growth and stability, the advantages of striking out on their own outweigh the benefits of remaining part of the SPP family. homas explained that the rest of SPP’s holding are in a different market – heavy industrial – which is out of step with SPTS. Additionally, he noted that SPTS’s improved revenue of $200M accounts for 90% of SPP’s profit in 2010.
Thomas said the buyout is a good opportunity for both sides. Backed by Bridgepoint, a European private equity firm, the deal is a debt free arrangement, providing an infusion of cash for SPP while allowing them to focus on what they do and do it well, noted Thomas. And SPTS now has the freedom to do what they want as a privately held company; which is a good place to be when you’re focusing on developing niche markets and R&D. SPP will still maintain a minority share in the company and work together in a joint venture for the Japanese market, under the watchful eye of Susumu Kaminaga, Chairman of SPP.
Another major occurrence in the last year was SPTS’s acquisition of the DRIE assets of Tegal Corp, which includes Pronova plasma source technology, and the development center in Annecy, France. While SPTS will no longer sell Tegal etch tools, they will continue to support its install base, noted Thomas. Market share has changed considerably now that the three competing companies (STS, Aviza and Tegal) are one. According to Thomas, SPTS has 85% of the market for middle of the line process tools (DRIE, PVD and CVD) an is the #1 supplier of DRIE tools. He says the company’s TSV emphasis, having started as a leader in via last etch, CVD and PVD allows them to offer guidance and stewardship to the OSATS, who have all been fairly new to these processes, whereas the foundries and IDMs tend to be all set with legacy tools from front-end manufacturing. As such, SPTS tools can be found in the top five OSAT companies.
With all this good news to share, it’s no wonder David Butler greeted with a huge smile and hearty handshake at the SPTS party at SEMICON West. It’s all coming together nicely. We’ll see what the next year brings. I wish them the best of luck!