UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 
Date of Report (Date of earliest event reported): December 4, 2014
 
VEECO INSTRUMENTS INC.
(Exact name of registrant as specified in its charter)

Delaware 
  (State or other jurisdiction
of incorporation)	 	0-16244 
  (Commission
File Number)	 	11-2989601 
  (IRS Employer
Identification No.)	
 
Terminal Drive, Plainview, New York 11803 
(Address of principal executive offices)
 
(516) 677-0200
  (Registrant’s telephone number, including area code)
 
Not applicable 
 (Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o                   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o                   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o                   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o                   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
Item 1.01 Entry Into a Material Definitive Agreement
 
On December 4, 2014, Veeco Instruments Inc. (“Veeco”) acquired privately held Solid State Equipment Holdings LLC (“SSEH”), based in Horsham, Pennsylvania.  The acquisition was made pursuant to a Securities Purchase Agreement (the “Agreement”), dated December 4, 2014, by and among Veeco, SSEH and certain other parties named therein (the “Acquisition”).
 
Under the terms of the Agreement, Veeco paid approximately $150 million in cash, subject to customary adjustments.  A portion of the purchase price was placed in escrow to support certain indemnity obligations under the Agreement.  The Agreement contains customary representations, warranties, covenants and indemnification provisions.
 
On December 4, 2014, Veeco issued a press release announcing the Acquisition and, on December 5, 2014, Veeco held a conference call to discuss the Acquisition.  In connection with the conference call, Veeco posted a presentation relating to the Acquisition on its website (www.veeco.com). Copies of the press release and presentation are furnished as Exhibit 99.1 and Exhibit 99.2 to this report.
 
Item 9.01 Financial Statements and Exhibits.
 
(d)  Exhibits .

Exhibit	 	Description	
 	 	 	
99.1	 	Press release issued by Veeco dated December 4, 2014	
 	 	 	
99.2	 	Presentation: Veeco Acquires Solid State Equipment Holdings LLC, December 5, 2014  Investor Conference Call	
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

December 5, 2014	VEECO INSTRUMENTS INC.	
 	 	
 	By:	/s/ Gregory A. Robbins	
 	 	 	
 	Name:	Gregory A. Robbins	
 	Title:	Senior Vice President and General Counsel	
 
2 

 
EXHIBIT INDEX

Exhibit	 	Description	
 	 	 	
99.1	 	Press release issued by Veeco dated December 4, 2014	
 	 	 	
99.2	 	Presentation: Veeco Acquires Solid State Equipment Holdings LLC, December 5, 2014  Investor Conference Call	
 
3 

EXHIBIT 99.1

	NEWS	
 
FOR IMMEDIATE RELEASE
 
VEECO COMPLETES ACQUISITION OF SOLID STATE EQUIPMENT HOLDINGS LLC
 
Accretive Acquisition Provides Complementary, Differentiated Technology for
Greater Access to High Growth Markets
 
Management Conference Call to be Held Friday December 5, 2014
 
Plainview, N.Y., December 4, 2014 - Veeco Instruments Inc. (Nasdaq: VECO) today announced that it has acquired privately held Solid State Equipment Holdings LLC (“SSEC”), based in Horsham, Pennsylvania.  SSEC is a leading innovator in single wafer wet etch, clean and surface preparation equipment targeting high growth segments in advanced packaging, micro-electro-mechanical systems (MEMS) and compound semiconductor.
 
“SSEC is a highly successful process equipment company that is a great strategic fit with Veeco,” said John R. Peeler, Veeco’s Chairman and Chief Executive Officer.  “Their complementary and differentiated ‘soak and spray’ technology delivers single wafer control with the low cost of batch processing. SSEC extends our compound semiconductor and MEMS footprint, and represents a stepping stone to the high-growth advanced packaging market. This is a synergistic transaction that will be immediately accretive and that we expect will drive growth and profitability.”
 
Demand for higher performance, increased functionality, smaller form factor and lower power consumption in mobile devices, consumer electronics and high performance computing is accelerating advanced packaging technology adoption.  Key drivers for this inflection are applications in 3D stacked memory, 3D system-on-chip and MEMS.  Increasing shipments in smartphones and wearable electronics with more sophisticated sensing functions further drive growth in the MEMS market.  Veeco estimates that its served available markets for advanced packaging, compound semiconductor and MEMS are all growing at double-digit compound annual growth rates.
 
Herman Itzkowitz, SSEC’s Chief Executive Officer said, “We are excited to join the Veeco team.  Veeco is a dynamic market leader in compound semiconductor equipment for LED, power electronics, and wireless devices. Combining resources will enable us to accelerate growth and to pursue market opportunities in advanced packaging and MEMS. In addition, we have significant untapped potential in Asia and Europe, where Veeco’s impressive sales and service network will provide connectivity to key customers.”
 
About SSEC
 
SSEC designs and manufacturers wafer processing equipment for compound semiconductor, MEMS, semiconductor advanced packaging, photomask and other applications.  SSEC provides customers with leading-edge processes, reliability and value. All SSEC systems are engineered from the inside out and are configurable according to customer process needs and their manufacturing and business objectives.  For more information, please visit: http://www.ssecusa.com

 
Details of the Transaction
 
Under the terms of the agreement, Veeco has acquired SSEC for a total consideration of approximately $150 million in cash, subject to customary adjustments.  Veeco is forecasting SSEC’s revenues to be $65 million in 2015. Given SSEC’s financial performance over the last few years, we expect them to provide earnings before interest, taxes, depreciation, amortization, equity compensation, and other non-recurring items (adjusted EBITDA) of greater than 20% of sales in 2015.  The transaction is expected to be significantly accretive to Veeco in fiscal 2015 on a non-GAAP earnings per share basis.
 
Veeco’s Q4 2014 stand-alone performance is tracking in-line with previously published financial guidance.  However, due to SSEC acquisition related accounting, our previously published GAAP and non-GAAP guidance cannot be relied upon.
 
Management Conference Call
 
Veeco’s management will host a conference call to review this transaction tomorrow, December 5, 2014, at 10:00 am Eastern time.  The call will be webcast live on the Veeco website at www.veeco.com. The call can also be accessed by dialing 1-888-737-3662 (toll free) or 1-913-312-1507 using passcode 7022579. A replay of the call will be available beginning at 1:00 pm ET tomorrow through Friday, December 19 at 1:00 pm ET at 1-888-203-1112 (toll free) or 1-719-457-0820, using passcode 7022579, and on the Veeco website. A slide presentation will be available for listeners to follow along, so please visit our website prior to the event.
 
About Veeco
 
Veeco’s process equipment solutions enable the manufacture of LEDs, flexible OLED displays, solar cells, power electronics, hard drives, MEMS and wireless chips.  We are the market leader in LED, MBE, Ion Beam and other advanced thin film process technologies.  Our high performance systems drive innovation in energy efficiency, consumer electronics and network storage and allow our customers to maximize productivity and achieve lower cost of ownership.  For information on our company, products and worldwide service and support, please visit www.veeco.com.
 
To the extent that this news release discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the risks discussed in the Business Description and Management’s Discussion and Analysis sections of Veeco’s Annual Report on Form 10-K for the year ended December 31, 2013 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases.  Additional risks specifically associated with this transaction relate to the expected benefits to Veeco from completing the acquisition and the expected financial performance of Veeco following completion of the acquisition.  Statements regarding future events are based on the parties’ current expectations and are necessarily subject to associated risks related to the potential impact on the business of SSEC due to the acquisition, the retention of employees of SSEC and the ability of Veeco to successfully integrate SSEC’s market opportunities, technology, personnel and operations and to achieve expected benefits. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.
 
###
 
Veeco Instruments Inc.
Investors:
Debra Wasser
516-677-0200 x1472
dwasser@veeco.com
 
Media:
Jeffrey Pina
516-677-0200 x1222
jpina@veeco.com

Exhibit 99.2

	December 5, 2014 Investor Conference Call Veeco Acquires Solid State Equipment Holdings LLC	

	Safe Harbor To the extent that this presentation discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the risks discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K for the year ended December 31, 2013 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Additional risks specifically associated with this transaction relates to the expected benefits to Veeco from completing the acquisition and the expected financial performance of Veeco following completion of the acquisition. Statements regarding future events are based on the parties' current expectations and are necessarily subject to associated risks related to the potential impact on the business of SSEC due to the acquisition, the retention of employees of SSEC and the ability of Veeco to successfully integrate SSEC’s market opportunities, technology, personnel and operations and to achieve expected benefits. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.	

	Introduction Veeco has acquired Solid State Equipment Holdings LLC (SSEC), a leading innovator in single wafer wet etch, clean and surface preparation equipment (“Precision Surface Processing”) SSEC strengthens Veeco’s position in Compound Semi (LED, Power Electronics & Wireless) and MEMS, and adds a new vector for growth in Advanced Packaging Immediately accretive transaction: Forecasted to add $65 million of profitable revenue with adjusted EBITDA contribution >20% of sales in 2015 Funded with ~$150 million of cash from Veeco balance sheet	

	Acquisition Rationale Increased Access to High Growth Markets SSEC extends our compound semiconductor and MEMS footprint and is a stepping stone to the high growth Advanced Packaging market Complementary, Differentiated Technology SSEC’s “Soak and Spray” technology enables single wafer control with the low cost of batch processing Synergistic & Accretive Combination that Drives Growth and Profitability Veeco will accelerate growth for a robust, highly profitable business 1 2 3	

	SSEC Overview Leading innovator in single wafer wet etch, clean and surface prep equipment Key Facts and Figures Markets Addressed Primary Applications Corporate Headquarters: Horsham, PA Employees Sq. Ft. Facility Years of Consecutive Profitability Customer Installations 21 ~3,000 115 50,000 Metal Lift-Off Under Bump Metal Etch Thick Film Strip Flux Clean Adv Packaging MEMS Other MEMS Comp Semi Advanced Packaging Compound Semi Wafer Thinning Approx. annual revenue	

	SSEC Configurable Platform Serves Multiple Applications 50mm 450mm 1 Platform, Multiple Substrate Sizes Photoresist Strip Si Etch Spin Coat Strip Metal Lift Off Metal Etch Flux Clean Develop Compound Etch Clean SSEC WaferEtch	

	Increased Access to High Growth Markets 1	

	SSEC Expands Veeco’s Served Markets Display Data Storage Expands Veeco’s footprint in Compound Semiconductor & MEMS Stepping Stone to Fast-Growing Advanced Packaging Market Compound Semiconductor (LED, Power Electronics & Wireless) MEMS	

	SSEC Extends our Already Large Footprint in Compound Semiconductor ~Served Available Market (SAM)* End Markets 2014 SAM ~ $480M 2017 SAM ~ $740M SAM CAGR: > Processes Veeco MOCVD MBE SSEC Metal Lift-Off (MLO) Thick Resist Removal Wet Etch *Veeco & SSEC Estimates/Systems Only Source: Yole Development 15%	

	SSEC Strengthens our Emerging MEMS Opportunity ~Served Available Market (SAM)* Smartphone Application Example 2014 SAM ~ $65M 2017 SAM ~ $90M SAM CAGR: Processes Veeco Ion Beam Etch SSEC MLO Thick Resist *Veeco & SSEC Estimates/Systems only Autofocus MEMs Actuator 15-17 MEMS in Red Wet Etch Wafer Thinning 3D & Trench Cleaning Source: Yole Development 10%	

	SSEC Adds New Advanced Packaging Growth Vector ~Served Available Market (SAM)* Market and Applications 2014 SAM ~ $145M 2017 SAM ~ $230M SAM CAGR: SSEC Processes Wafer Thinning Through Silicon Via (TSV) Reveal & Clean Under Bump Metal (UBM) and Redistribution Layer (RDL) Resist Removal and Etch Flux Removal *Yole/ Veeco & SSEC Estimates/Systems only 18%	

	Complementary Differentiated Technology 2	

	Why SSEC Wins in Compound Semiconductor Metal Lift Off Unique soak and spray architecture Batch process throughput with single wafer process performance Etch Low capital cost, front end quality process, end point detection Batch Soak Wet Transfer Single Wafer Spray WaferEtch	

	Why SSEC is Well Positioned to Win in MEMS Highly customizable single wafer wet processing solutions No wet processing equipment company yet strategically positioned in MEMS Metal Lift-Off Thick Film Remover Resist Development Trench Cleaning SSEC WaferStorm	

	Why SSEC Wins in Advanced Packaging Cleaning Tool Plasma Etch Equipment Silicon Thickness Measurement Award received by 3DIncites as best 2.5D/3D manufacturing equipment 2014 Highest uniformity and fast etch rates Value Proposition – TSV Reveal Lowest Cost of Ownership for Single Wafer Wet Processing CMP 4 in 1 System	

	Synergistic and Accretive Combination 3	

	Details of the Transaction Veeco has completed the acquisition of SSEC, a privately held company Veeco paid ~$150 million cash at closing, no earn-outs or contingencies SSEC’s management team will continue to run the business as a unit of Veeco Transaction 2015 SSEC Forecast: Revenue $65 million Adjusted EBITDA* >20% of sales Significantly accretive transaction Impact to Veeco Q4 2014: Veeco stand-alone performance tracking in-line with previously published financial guidance Due to SSEC acquisition related accounting, previously published GAAP and non-GAAP guidance cannot be relied on SSEC Improves Veeco’s Profitability *Adjusted EBITDA = Earnings before interest, taxes, depreciation, amortization, equity compensation and other non-recurring items	

	Key Acquisition Synergy: Expanded Customer Access for SSEC SSEC Approximate Annual Sales by Region Veeco Will Help Accelerate Growth For A Robust, Highly Profitable Business Veeco key account relationships with many of SSEC current and target customers Veeco Asia and Europe Sales and Service network will dramatically expand SSEC’s access and connectivity to global industry leaders	

	Advanced Packaging Compound Semiconductor MEMS Veeco Provides SSEC with Greater Access to Universe of Target Customers SSEC Serves 5 of 5 Top OSATs SSEC Serves 4 of 5 Top Players in Mobility; 3 of 7 Top Suppliers in LED SSEC Serves Top 3 MEMS Companies; 13 of Top 20 Note: Universe of target companies; logos do not reflect current SSEC customers; trademarks are property of respective owners	

	SSEC Precision Surface Processing Aligns with Our “Three Mega Trend” Strategy LED Lighting & Power Electronics (MOCVD, SSEC) Wireless Chips (MBE, SSEC) Semiconductor Research (MBE) Hard Disk Drives (IBE, IBD, PVD, SSEC) Build on Existing Leadership Advancing Thin Film Technologies MEMS Devices (IBE, SSEC) Advanced Semi Devices: (IBD, IBE, ALD, SSEC) Establish a Strong Position in New Markets OLED Lighting (ALD) Flexible OLED Displays (ALD)	

	Q & A