GT Solar Acquires Crystal Systems, Looks to LED Market

GT Solar International, Inc. (NASDAQ: SOLR), a provider of photovoltaic solar production equipment and services, manufacturing services for the solar industry, has acquired  Crystal Systems, Inc.–a company that manufactures sapphire substrates used in the LED, defense, medical and aerospace industries.

The acquisition price was $24 million in cash, 5.4 million shares of GT Solar common stock and a $21 million cash earn-out. 

Founded in 1971, Crystal Systems specializes in
crystal growth technology and supplies sapphire and
Ti:sapphire material. The company’s development and manufacturing operations are located in Salem,
Massachusetts. Fred Schmid, founder of Crystal Systems and the inventor
of the Heat Exchanger Method or HEM process, will be joining GT Solar in
a senior technical capacity to further accelerate the commercialization
of this technology.

“Crystal Systems’ sapphire process knowledge complements our expertise in silicon growth technologies and we believe this combination will allow us to quickly deliver products that leapfrog sapphire crystallization technology available from other suppliers,” said Tom Gutierrez, GT Solar’s president and CEO. “We expect to capitalize on the attractive opportunities we have identified in equipment, LED, and high tech specialty markets that require high-quality, low cost crystalline substrates.”

Industry analysts project that the LED market could grow up to a 40% compound annual growth rate over the next several years driven by increased sales of products such as flat panel televisions and commercial and residential lighting. Sapphire is the most widely used substrate for this fast-growing market.

The cash earn-out provision of the acquisition is based on the attainment of certain financial and technical targets.

Crystal Systems expects revenues of approximately $16 million for the 2010 calendar year. GT Solar said the company will positively contribute to its operating income over the next 18 months and is expected to be accretive on an EPS basis by year end FY12.