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Friday 01 October, 2010

AZ Electronic Mtrls

AZ Electronic Materials - In

RNS Number : 6505T
AZ Electronic Materials Ltd
01 October 2010
 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN

 

This announcement does not constitute or form part of any offer for sale or subscription of or solicitation to buy or subscribe for any securities, and neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

 

This announcement is an advertisement and not a prospectus. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus to be published by AZ in connection with the admission of the ordinary shares to the Official List of the United Kingdom Listing Authority and to trading on London Stock Exchange plc's main market for listed securities (the "London Stock Exchange").

_______________________________________________________________________

 

 

 

 

AZ ELECTRONIC MATERIALS GROUP

 

ANNOUNCEMENT OF INTENTION TO LIST ON THE LONDON STOCK EXCHANGE

 

1 OCTOBER 2010

 

AZ Electronic Materials Group ("AZ") today announces its intention to apply for admission to the premium listing segment of the Official List of the UK Financial Services Authority and to trading on the main market for listed securities of the London Stock Exchange plc (together, "Admission") and to proceed with an initial public offering of its ordinary shares (the "Shares") to institutional investors in the United Kingdom and elsewhere (the "Offer" or the "IPO"). [i]

 

AZ Highlights

 

§ AZ is a leading global producer and supplier of high quality, high-purity specialty chemical materials used in the manufacture of Integrated Circuits (ICs) and Flat Panel Displays (FPDs).

§ AZ enables innovation throughout the "digital world" where there is increasing global demand and a drive towards smaller, faster, more powerful and less expensive technology.

§ Its advanced products are integral to the manufacture of a wide variety of electronic devices with consumer and business applications.

§ These include mobile communication devices, flat screen televisions, computers, energy conservation, automotive and industrial applications and the developing LED and solar markets.

§ Key customers include virtually all of the leading global IC and FPD manufacturers including Samsung, Toshiba, Hynix, TSMC, AUO and Chi-Mei Innolux.

§ AZ holds the number one or number two market share position (based on 2009 sales values) in the high value-added IC materials and FPD product categories that it serves.

 

§ For the twelve months ended 30 June 2010, AZ generated consolidated revenue of US$610.6 million, and an adjusted EBITDA [ii] of US$200.3 million (a margin of 32.8 per cent).

§ AZ operates through three business divisions: IC Materials (66.1 per cent of revenue for the twelve months ended 30 June 2010), Optronics (29.3 per cent of revenue) and Printing and Other (4.6 per cent of revenue).

§ AZ operates eight production facilities located through Asia, North America and Europe, with the newest facilities in Asia.  It has five principal R&D "centres of excellence", located in Shizuoka, Japan; Branchburg, USA; Wiesbaden, Germany; Ansung, South Korea; and Lamotte, France.

§ Funds affiliated with the Carlyle Group and Vestar Capital Partners each currently own 41.8 per cent (83.5 per cent collectively) of AZ's outstanding shares and the rest of AZ's shares are held in management equity plans [iii] in which AZ's senior managers have a participation interest (together, "the Shareholders").

 

Competitive Strengths

 

The Directors believe that AZ benefits from the following key strengths:

 

§ Well positioned in structural growth markets

§ Market leader in critical and high value-added niches

§ Unique Asian footprint close to industry-defining customers

§ Collaborative R&D enabling customer innovation

§ Strong and defendable business model

§ Experienced and long-serving management and highly educated workforce

§ Attractive, capital efficient financial profile

 

Strategy

 

AZ's strategy is to:

 

§ Develop new and innovative niche IC materials products and enabling technologies

§ Capture Asian FPD expansion by leveraging existing customer relationships and local presence

§ Maintain world-class, integrated R&D platforms

§ Prioritise attractive niche market segments in which AZ can achieve and maintain leadership positions

§ Capture growth in existing and new opportunities across its customer base

§ Pursue new market opportunities using existing technologies



Details of the Offer

 

AZ believes that the proposed IPO will enhance its profile and status with existing and potential customers and strengthen its ability to attract and retain the best talent. AZ intends to use the primary proceeds from the Offer (approximately US$400 million) to repay a portion of its existing debt facilities and for general corporate purposes. The Offer will also provide an opportunity for current shareholders to realise part of their investment in AZ.

 

UBS Investment Bank, Goldman Sachs and Deutsche Bank are acting as joint sponsors, joint global co-ordinators and joint bookrunners in relation to the Offer. Collins Stewart and Société Générale are acting as co-lead managers. Rothschild is acting as financial adviser to AZ and the Shareholders.

 

Geoff Wild, Chief Executive Officer of AZ said:

 

"AZ is at the forefront of innovation at the world's leading manufacturers of advanced semiconductor chips, flat panel displays, LEDs and new solar power devices through the development and supply of highly advanced specialty chemicals. We are driven by fast growing end-markets with strong global demand. The proposed IPO will provide added impetus to the development of the company, enabling AZ to pursue new business opportunities in large and potentially high-growth markets that leverage our existing expertise and capabilities. The business has great momentum and we are well positioned to deliver further growth."

 

Enquiries

 

Financial Dynamics               +44 (0) 20 7269 7176
Ben Foster
Charlie Armitstead
Andrew Lorenz

UBS Investment Bank         +44 (0) 20 7567 8000
Christopher Smith
Adrian Lewis
Anthony Fitzpatrick
Chris Madderson

Goldman Sachs                     +44 (0) 20 7774 1000
Alasdair Warren
Mark Sorrell
Jim Wight
Marc-Olivier Regulla

Deutsche Bank                     +44 (0) 20 7545 8000
Josef Ritter
Edward Sankey
Toby Clark
Arkadi Nachimowski

Rothschild                             +44 (0) 20 7280 5000
Nigel Himsworth
Laurent Feniou
Dominic Epton

 

 

 



Forward-looking statements

 

This announcement contains "forward‑looking" statements, beliefs or opinions, including statements with respect to the business, financial condition, results of operations and plans of AZ. These forward‑looking statements involve known and unknown risks and uncertainties, many of which are beyond AZ's control and all of which are based on the Directors' current beliefs and expectations about future events. Forward‑looking statements are sometimes identified by the use of forward‑looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward‑looking statements include all matters that are not historical facts. Forward‑looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or AZ with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to AZ's business, concerning, amongst other things, the results of operations, financial condition, prospects, growth and strategies of AZ and the industry in which it operates.

 

These forward‑looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing AZ. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward‑looking statements. The forward‑looking statements contained in this announcement speak only as of the date of this document. AZ disclaims any obligation or undertaking to release publicly any updates or revisions to any forward‑looking statements contained in this document to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure and Transparency Rules of the Financial Services Authority.

 

Disclaimer

 

Neither this announcement, the publication in which it is contained nor any copy of it may be taken, transmitted or distributed, directly or indirectly, in or into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) ("the United States"). Neither this announcement, the publication in which it is contained nor any copy of it may be taken, transmitted or distributed, directly or indirectly, in or into Australia, Canada or Japan or to any persons in any of those jurisdictions or any other excluded territories. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities law. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

 

This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The Offer and the distribution of this announcement and other information in connection with the listing and Offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

In particular, this announcement does not constitute an offer for sale of, or a solicitation to purchase or subscribe for, any securities in the United States, Australia, Canada, Japan, Hong Kong or in any jurisdiction to whom or in which such offer or solicitation is unlawful. No securities of AZ have been, or will be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), and securities of AZ may not be offered or sold in the United States absent registration or an applicable exemption from, or transaction not subject to, the registration requirements of the Securities Act.  No securities of AZ have been, or will be, registered under the securities laws of Australia, Canada, Japan or Hong Kong. Subject to certain exceptions, no securities of AZ may be offered or sold in Australia, Canada, Japan or Hong Kong or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or Hong Kong. AZ does not intend to conduct a public offer of the Shares in the United States, Australia, Canada, or Japan or Hong Kong.

 

The contents of this announcement, which has been issued by and is the sole responsibility of AZ, have been approved solely for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended) by Deutsche Bank AG, London Branch ("Deutsche Bank"), Goldman Sachs International ("Goldman Sachs") and UBS Limited ("UBS").

 

This announcement does not constitute a recommendation concerning the Offer. The date of Admission may be influenced by things such as market conditions. There is no guarantee that Admission will occur and you should not base your financial decisions on AZ's intentions in relation to Admission at this stage. Acquiring securities to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. Information in this announcement or any of the documents relating to the Offer cannot be relied upon as a guide to future performance. Potential investors should consult a professional advisor as to the suitability of the Offer for the entity concerned.

 

Deutsche Bank, Goldman Sachs, UBS, Collins Stewart Europe Limited ("Collins Stewart") and Rothschild, each of which is authorised and regulated in the UK by the Financial Services Authority, and Société Générale Corporate and Investment Banking ("Société Générale") which is authorised by the Comité des Établissements de Crédit et des Entreprises d'Investissement and supervised by the Commission Bancaire and is authorised and subject to limited regulation by the Financial Services Authority, are acting exclusively for AZ and no one else in connection with the Offer and will not regard any other person as their client in relation to the Offer and will not be responsible to anyone other than AZ for providing the protections afforded to their respective clients nor for giving advice in relation to the Offer the contents of this announcement or any transaction, arrangement or other matter referred to herein.

 

In connection with the Offer, Deutsche Bank, Goldman Sachs, UBS, Collins Stewart and Société Générale or any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of AZ or related investments in connection with the Offer or otherwise. Accordingly, references in the prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, Deutsche Bank, Goldman Sachs, UBS, Collins Stewart and Société Générale or any of their respective affiliates acting as investors for their own accounts. Deutsche Bank, Goldman Sachs, UBS, Collins Stewart and Société Générale do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. None of Deutsche Bank, Goldman Sachs, UBS, Collins Stewart, Société Générale or Rothschild or any of their respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to AZ, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

 

In connection with the Offer, one of Deutsche Bank, Goldman Sachs or UBS shall be appointed to act as stabilising manager (the "Stabilising Manager"). The Stabilising Manager or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any stock, market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

 

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

 



Notes to editors

 

History

 

The AZ business was originally a part of Hoechst AG, a German chemicals company (now Sanofi-Aventis), and in 1957 developed the first positive photoresist for use in the manufacture of ICs. The name AZ is taken from the photochemical compound diazo, first developed around 1943 to create photosensitive offset printing plates for use in ICs and FPDs. In 1967, the AZ business established its presence in Taiwan through toll manufacturing of photoresist. The AZ business continued its international expansion in 1971 when it opened a production facility in Branchburg, New Jersey in the United States. In 1986, the AZ business opened a production facility in Shizuoka, Japan, supplying photoresist to the flat panel display industry, and became one of the first suppliers in the market. In 1989, the AZ business established a production facility in Ansung, South Korea where it began production of FPD materials.

 

In 1997, the AZ business was acquired by Clariant, a Swiss specialty chemicals company as part of its acquisition of Hoechst AG's speciality chemicals operations. In 1998, the AZ business opened a production facility and functional testing centre in South Korea, and in 1999, the AZ business established a manufacturing and testing facility in Martin, South Carolina in the United States. In 2003, the AZ business began commercial sales of dielectrics products, which are used in the manufacture of ICs and are proprietary products of the AZ business.

 

In 2004, the AZ business was acquired from Clariant by funds affiliated with the Carlyle Group. The AZ business opened a new production facility in Hsin-Chu, Taiwan in 2004 and in Suzhou, China in 2005. In 2007, funds affiliated with Vestar Capital Partners acquired a stake in the AZ business. In 2007 and 2008, the AZ business invested in new facilities in Japan and Taiwan for the production of dielectrics and FPD photoresist, respectively. In 2008 and 2009, the AZ business moved a large portion of the production of FPD photoresist from Japan to Taiwan.

 

Competitive Strengths

 

The Directors believe that AZ benefits from the following key strengths:

 

Well positioned in structural growth markets. AZ believes its products serve attractive markets with favourable long-term growth characteristics. The Directors believe that there will be significant growth in demand for electronics products that incorporate ICs and FPDs, driven by growing per capita demand for increasingly sophisticated consumer electronics products, rising income in emerging markets and technological advances. The IC manufacturing industry has experienced significant historical growth in the volume of silicon wafer starts, with a CAGR of 6.7 per cent in silicon wafer starts over the period from 1990 to 2009, according to Gartner (based on 12-inch equivalent silicon wafer starts by SICAS participants). In the IC Materials business, demand for AZ's products has been driven by the volume of silicon wafer starts in the IC manufacturing industry, as well as the number of process steps and layers in IC manufacturing, which have increased in order to enable the manufacturing of smaller, faster, more powerful and less expensive ICs. The FPD industry has also experienced strong growth, with a CAGR of 33.5 per cent in FPD screen area growth (in millions of square metres) over the period from 2006 to 2009 according to DisplaySearch. In the FPD business, demand for AZ's products has been driven by growth in both the number of FPD units produced and the surface area of FPDs, which has increased due to demand for increasingly larger panel sizes and touch screen applications. The Directors believe that AZ is well positioned to take advantage of expected growth in the IC and FPD electronic materials markets as a result of its market-leading positions and its strong customer relationships with virtually all major IC and FPD manufacturers.

 

Market leader in critical and high value-added niches. AZ holds the number one or number two market share position (based on 2009 sales values) in the high value-added IC materials and FPD product categories that it serves, which products together accounted for 77.9 per cent of AZ's consolidated revenue for the twelve months ended 30 June 2010, 77.5 per cent of AZ's consolidated revenue for the year ended 31 December 2009 and for 78.3 per cent of AZ's consolidated revenue for the six months ended 30 June 2010. AZ is the primary supplier for a number of these products. These product categories include high value-added, high-purity specialty chemical products that act as critical enabling materials in the manufacture of increasingly complex ICs and FPDs. The Directors believe that AZ's reputation for high-quality, high-purity, reliable and technologically advanced specialty chemical products has facilitated the development of strong relationships with virtually all of the leading global IC and FPD manufacturers, a significant number of which have been customers of the AZ business for more than 15 years.

 

Unique Asian footprint close to industry-defining customers. During the period from 2007 to 2009, AZ generated 71.4 per cent of its annual consolidated revenue from customers located in Asia, which reflects AZ's long-standing and collaborative relationships with virtually all of the leading global IC and FPD manufacturers, including Samsung, Toshiba, Hynix, TSMC, AUO and Chi-Mei Innolux. Over that same period, AZ generated the largest proportion of its consolidated revenue from customers in the key markets of Korea, Japan, Taiwan, China and Singapore and accordingly is well positioned to benefit from the anticipated growth in the Asian IC and FPD markets. AZ is the only global FPD materials supplier with full service manufacturing, distribution, R&D, sales and customer service capabilities in all of the key FPD producing countries in Asia in close proximity to leading FPD customers. AZ is also the only major FPD materials supplier with local manufacturing capabilities in China.

 

Collaborative R&D enabling customer innovation. AZ has been able to leverage its expertise in photolithographic and silicon technologies in order to develop and tailor products to meet its customers' highly specialised requirements. AZ's R&D team works in partnership with industry-leading IC and FPD manufacturers and research institutions to develop specialty products and commercial solutions that enable manufacturing of next generation IC and FPD products, and is closely aligned with its customers' development timelines and manufacturing needs. From 2005 to 2009, AZ spent approximately US$181 million in aggregate on its R&D activities (representing approximately 6.7 per cent of AZ's consolidated revenue over that period). These R&D activities are primarily focused on niche IC materials products and other speciality segments, which provide opportunities for comparatively higher revenue growth and margins. AZ has successfully developed and patented, and sells, a number of innovative and proprietary products that act as critical enablers for IC and FPD manufacturers. These products have assisted AZ's customers in overcoming complex and capital-intensive manufacturing challenges, and include anti-reflective coatings in the IC and FPD industries. The Directors estimate that sales of products that were first commercialised in the last three years accounted for approximately 23 per cent of AZ's consolidated revenue in 2009, as compared to approximately 16 per cent in 2006. For the year ended 31 December 2009, 75.6 per cent of AZ's consolidated revenue was attributable to patented products.

 

Strong and defendable business model. AZ enjoys long-standing partnerships with leading IC and FPD manufacturers due to its history of innovation, strong reputation and track record of reliably supplying high value-added specialised products. AZ integrates its R&D efforts with its customers' development timelines and manufacturing needs, which positions AZ to be an integral part of its customers' future growth and success. This position is further reinforced by the critical importance of AZ's products to its customers' manufacturing processes which allows customers to reduce, delay or avoid capital expenditure and enhance manufacturing yields. AZ also benefits from its geographic proximity to IC and FPD industry leaders, the variety of products supplied to key customers and the relatively low proportion of costs that AZ's products represent of customers' total costs. As a result, AZ benefits from high barriers to entry in these markets. The Directors believe that these conditions introduce a "virtuous circle" of being able to invest in R&D rather than in capital goods, deliver growth to meet clearly identified customer needs and maintain flexibility to innovate and grow in the future.

 

Experienced and long-serving management and highly educated workforce. AZ's senior management team leads an experienced, highly-educated and multicultural workforce, approximately 49 per cent of whom hold university and/or post-graduate degrees and approximately 47 per cent of whom have been with AZ for more than 10 years. AZ's senior management team consists of seasoned industry professionals with significant experience in the specialty chemicals and electronic materials industries (an average of more than 20 years) and a proven track record of growing the AZ business since its acquisition from Clariant in 2004. For example, AZ's adjusted EBITDA increased from US$95.0 million in 2005 to US$200.3 million in the twelve months ended 30 June 2010. AZ's strategic and operational management is based in Asia close to its customers, with financial reporting and controls, business planning, treasury and IT functions based in London.

 

Attractive, capital efficient financial profile. Over the period from 2007 to 2009 AZ achieved, on average, an annual adjusted EBITDA margin of approximately 30 per cent (after expensing all R&D costs), which compares favourably to margins of other European-listed specialty chemical manufacturers for that period. During this time, AZ efficiently implemented cost savings initiatives and process improvements for achieving maximum efficiencies in its business and manufacturing processes. The nature of AZ's manufacturing processes, which use batch manufacturing as well as outsourcing to toll manufacturers in selected capital intensive or lower-margin areas, is such that AZ has a relatively flexible cost structure and low capital intensity, with an average capital expenditure of 5.2 per cent of AZ's consolidated revenue over the period from 2007 to 2009. AZ's high margins and low capital intensity, combined with efficient management of working capital, has resulted in strong and consistent cash flow generation over the period from 2005 to 2009. In particular, AZ recorded cash generated from operations of US$469.4 million in aggregate over the period from 2007 to 2009.

 

Strategy

 

AZ's strategy is to:

 

Develop new and innovative niche IC materials products and enabling technologies. AZ plans to continue to focus its R&D activities on collaborating closely with leading IC manufacturing customers in enabling next generation technologies. The Directors believe that this customer-integrated approach to product development drives the profitability and growth of its IC materials business. Accordingly, AZ intends to continue to cooperate closely with key industry-leading IC customers and align its R&D activities with their manufacturing development timelines and particular needs, employing the expertise and experience of its global R&D centres of excellence together with local customer support. The Directors believe that this approach should foster greater client intimacy and stronger client relationships and increase the likelihood of commercial success of AZ's R&D efforts.

 

Capture Asian FPD expansion by leveraging existing customer relationships and local presence. The FPD manufacturing industry, which is primarily based in Asia, is expected to generate significant growth in sales volumes in the next five years. There is currently significant investment by leading Taiwanese, Korean and Japanese FPD manufacturers being undertaken in China. AZ plans to leverage its position as an incumbent supplier to virtually all of the leading FPD manufacturers to capture growth in China and secure new business from existing and new customers as they expand their Asian manufacturing operations. Accordingly, AZ plans to increase the scope and scale of its manufacturing and R&D activities in the key Asian markets, particularly China. This may include targeted capital investment in new production facilities and hiring of additional sales, R&D and manufacturing personnel.

 

Maintain world-class, integrated R&D platforms. AZ intends to maintain its commitment and discipline in partnering with existing and new customers, equipment makers and universities in the R&D process to develop innovative chemical solutions to meet the manufacturing technology needs of IC and FPD customers. The Directors believe that this customer-integrated R&D process is of strategic importance to developing and strengthening relationships with customers and enhancing the relevance of, and returns on, its R&D activities. By focusing on early stage involvement with customers and close coordination of product development, in particular with respect to next generation IC and FPD products, AZ seeks to remain on the leading edge of technological development.

 

Prioritise attractive niche market segments in which AZ can achieve and maintain leadership positions. AZ intends to focus its efforts on attractive products and markets which offer the potential for it to achieve a leading market share position. To achieve this, AZ plans to continue taking a disciplined approach to the allocation of capital, R&D and other resources, and to pursue new business opportunities in specialty products and markets believed to offer higher growth prospects and longer product life-cycles that support sustainable margins with relatively low capital intensity. AZ also plans to target niche products that benefit from AZ's existing expertise and capabilities and that are expected to have better resistance to competitive pressure, due to their specialised nature, the high level of customisation and/or the availability of intellectual property protection. While the Directors believe that AZ currently has all of the technological capabilities and expertise needed in order to successfully execute its growth strategy, AZ will opportunistically consider the acquisition of new licenses, technologies and companies that are compatible with, or enhance, its strategy.

 

Capture growth in existing and new opportunities across its customer base. AZ supplies approximately 414 materials to its largest 17 customers across a number of geographies, production facilities and production lines. Approximately 38 per cent of AZ's IC niche materials were sold to these customers during the year ended 31 December 2009, and approximately 86 per cent of AZ's IC niche materials revenue was attributable to these customers during the year ended 31 December 2009. AZ also supplies a significant proportion of its niche IC materials products and FPD photoresist to these customers, many of whom are industry leaders. AZ's key sales priority is to leverage its position as an incumbent supplier to leading IC and FPD manufacturers and increase sales of new products to existing customers. AZ has developed a detailed multi-year strategic plan through 2015 that identifies new business opportunities by customer, by production facility, by production line and by volume of specialty chemicals used or dispensed, together with estimated values of additional business to AZ assuming the customers reach full production volumes. This strategic plan, which takes into account AZ's detailed knowledge of its customers' needs and plans, is used to allocate AZ's capital, R&D, management and other resources.

 

Pursue new market opportunities using existing technologies. AZ intends to pursue new business opportunities in large and potential high-growth product markets that leverage AZ's existing expertise and capabilities, particularly in the silicon technology and photoresist areas. AZ plans to focus on market opportunities that require high-purity, high value-added specialty chemicals and reliability of supply, for which there is a high degree of transferability of AZ's existing skills, and which are expected to experience strong future growth on account of the increasing focus on energy efficiency in lighting and other electronic products.

 

 

 

Board of Directors

 

John Whybrow is the Chairman of the Board. Since 2002, Mr Whybrow has also served as chairman of the board of directors of Wolseley plc, a FTSE 100 company engaged in the distribution of plumbing and building materials, after joining as a non-executive director in 1997. Mr Whybrow previously held a number of directorship roles, including non-executive director and chairman of the remuneration committee of Dixons Group plc, a retailer in high technology consumer electronics products, chairman of CSR plc, a semiconductor manufacturer, executive vice-president of Philips Electronics NV and president and chief executive officer of Philips Lighting BV. Mr Whybrow holds a B.Sc. in Mechanical Engineering from Imperial College London and received an MBA from Manchester Business School. In March 2002 he received the Polish Order of Merit for services to the economic development of Poland.

 

Geoff Wild joined AZ in January 2010 as Chief Executive Officer and is an Executive Director of the Company. He is based in Hong Kong. Mr Wild has extensive global experience in high technology businesses, including strategic planning, marketing, and improving operational effectiveness and profitability. Mr Wild's general management experience began in 1990 at Johnson Matthey's Electronic Materials division; in 1997 he joined Allied Signal Inc., as President of their electronics materials business, and he subsequently led Nikon Precision Inc., a manufacturer of lithographic equipment for the semiconductor industry. Mr Wild joined AZ from Cascade Microtech Inc, Beaverton, a worldwide leader in the design, development, and manufacture of advanced wafer probing solutions for the electrical measurement and test of semiconductor ICs, where he was chief executive officer and president. Mr Wild is also a non executive director of Axcelis Corporation and serves on their audit committee. He was previously an independent director of E-Ink Corporation where he chaired the compensation committee. Mr Wild holds a B.Sc. Hons in Chemistry from Bath University, UK.

 

Ken Greatbatch is Chief Financial Officer and an Executive Director of the Company. He is based in the UK and is a Chartered Accountant with significant international business experience. Mr Greatbatch joined AZ on its formation in October 2004. He was previously chief financial officer of Vantico S.A. and group finance director of BTP plc, both international chemical companies. Mr Greatbatch began his career in financial management in multinational companies such as Lucas Industries plc and Tomkins plc before moving into the chemicals industry when he joined Laporte plc. In the latter, Mr Greatbatch became chief executive of the Australasian businesses based in Sydney. He has previously held the positions of chairman of LeggMason Income and Growth Trust plc and non-executive director of The SkillsMarket Limited.

 

Andrew Allner is a Non-Executive Director of the Company. Since May 2010 he has served as the chairman the board of directors of Marshalls plc, a company specialising in landscape products, of which he has been a member since July 2003. Mr Allner is a member of the board of directors of The Go Ahead Group plc, a company providing bus, rail and aviation services, CSR plc, a semiconductor manufacturer, and Northgate plc, a vehicle rental company and also chairs the audit committees of those companies. Mr Allner has held various executive positions, including group finance director at RHM Limited/RHM plc, chief executive officer of Enodis plc, group finance director, chief financial officer and senior vice-president of Dalgety plc / Pic International Group plc, group finance director at Nycomed Amersham / Amersham International plc and director of financial planning and control at Guinness plc after being a partner at Price Waterhouse from 1975 to 1992. He holds a BA in Engineering and Economics from Exeter College, Oxford University.

 

Franck Falézan is a Non-Executive Director of the Company and is a managing director and partner of The Carlyle Group. Prior to joining Carlyle, Mr Falézan was a senior consultant with The Boston Consulting Group. At Carlyle, Mr Falézan has led investments in, and served as a board member of Le Figaro, Aprovia, Medimedia, Waterpik, Otor and Zodiac Marine & Pool, where he continues to serve as chairman of the board. Mr Falézan received his MBA from Harvard Business School where he graduated with distinction. He also received an MS from Ecole Polytechnique in France and sat on the board of the alumni association for eight years.

 

Jean-François Félix is a Non-Executive Director of the Company and is a managing director at Vestar Capital Partners Europe S.à.r.l. Prior to joining Vestar, Mr Félix was a consultant with McKinsey & Company in Paris and an investment professional at the private equity firm DSP/Equinox Industries. At Vestar, Mr Félix has led an investment in Sab Wabco AB and served as a board member. Mr Félix received his MBA from Harvard Business School. He is a graduate of HEC Paris and received his CEMS Master from Hochschule St. Gallen in Switzerland.

 

Gerald G. Ermentrout is a Non-Executive Director of the Company and is a currently non-executive director of KMG Chemicals, a listed specialty chemicals company in the United States and earned a MBA from Lehigh University. Previously he was at Air Products and Chemicals, which he joined in 1975 and where he held various management positions in global materials and equipment businesses, as well as having responsibility for major acquisitions and divestitures. During this time he served as Vice President and General Manager of the Electronic Chemicals Division from 1996 until his retirement in February 2007.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



[i] AZ will list its securities through a Luxembourg holding company (the "Company"), to be incorporated.

[ii] Adjusted EBITDA is equivalent to adjusted operating profit/(loss) and is defined as operating profit/(loss) adjusted to add back depreciation on property, plant and equipment, amortisation of intangible assets, monitoring fees and exceptional items. Exceptional items are those items believed to be exceptional in nature by virtue of their size and/or incidence, and have included restructuring costs, inventory fair value adjustment, impairment of goodwill, impairment of intangible assets, reversal of impairment of intangible assets, loss on disposal of business and transaction costs.

[iii] There are three management equity plans, the first of which is MEP I, a trust which holds 9.4 per cent of AZ's outstanding shares for the benefit of its current and former senior managers. The other two plans, MEP II and MEP III, are limited partnerships in which senior managers, as well as certain Carlyle and Vestar funds affiliated with the Carlyle Group and Vestar Capital Partners (the "Funds"), are limited partners. Should the IPO proceed, the shares in AZ held by these limited partnerships will be distributed to the limited partners in proportion to their respective capital contributions subject to specified rates of return in favour of the Funds that will depend on the share price.

 

Glossary

 

CMP slurry

"chemical mechanical planarisation" means the chemical and mechanical smoothing of dielectric layers of semiconductors, in order to ensure a uniform plane surface; "CMP slurry" means a viscous liquid with a high solids content used in the CMP of a wafer in order to ensure a uniform plane surface

 

Dielectrics

nonconductive material or insulator

 

EBRs

"edge bead remover" means a solvent mix used in both FPD and IC industries to remove photoresist at the substrate edge

 

Flat panel displays

thin lightweight video display used in laptops, televisions, mobile phones and notebook computers and employing liquid crystals, electroluminescence, or a similar alternative to cathode-ray tubes

 

Integrated circuits

fabrication technology that combines most of the components of a circuit on a single-crystal silicon wafer generally used as a proxy for semiconductors

 

LEDs

"light emitting diode" means a semiconductor diode that produces visible or infrared light when subjected to an electric current, as a result of electroluminescence

 

Photoresist

light-sensitive substance used to facilitate the transfer of glass substrate materials in FPD semiconductor wafers in IC

 

Wafer

thin slice with parallel faces cut from a semiconductor crystal

 

 

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This information is provided by RNS
The company news service from the London Stock Exchange
 
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