MEMC (NYSE: WFR) will pay $76 million to acquire Solaicx, a Santa Clara, California-based company that has developed continuous crystal growth manufacturing technology for monocrystalline silicon wafers.
MEMC said the Solaicx technology allows for very high-volume crystal growth compared to the silicon ingots produced in the traditional precision semiconductor manufacturing process. The enhanced electrical performance of wafers from Solaicx ingots is expected to allow solar cell manufacturers to create higher efficiency cells with very competitive silicon costs.
Solaicx has approximately 80 employees and a large-scale production facility in Portland, Oregon.
Ken Hannah, President of MEMC Solar Materials, said the monocrystalline silicon market is forecast to grow at a compound annual growth rate of about 50% over the next three years. He added that the acquisition will allow MEMC to significantly reduce the cost of monocrystalline silicon.
MEMC will pay to the existing securityholders of Solaicx at closing cash in the amount of $66 million, plus an additional amount in cash equal to amounts which have been recently invested in, or which may be invested prior to closing in Solaicx by its existing securityholders. The aggregate additional investment amount is estimated to be approximately $10 million.
The agreement also includes an earnout, should Solaicx meet certain performance targets in 2010 and 2011, of up to an additional $27.6 million payable to Solaicx securityholders, consisting of cash and MEMC common stock at the election of the securityholder.
The acquisition is expected to close by the end of June 2010.
MEMC said it expects the acquisition to be accretive to earnings in 2011, subject to purchase accounting adjustments.
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