UPDATE 2-GT Solar to buy Crystal Systems, eyes LED market
* GT Solar to pay $24 mln in cash, issue 5.4 mln shares
* Sees deal adding to EPS by end of FY 2012
* Deal to add to operating income in the next 18 months
* GT Solar shares up 3.7 percent (Adds analyst comments, details, updates share price)
By Adveith Nair
NEW YORK, July 30 (Reuters) - U.S. solar equipment maker GT Solar International Inc SOLR.O said on Friday it would buy privately held sapphire maker Crystal Systems for about $57.8 million in cash and stock, giving it a foothold in the fast-growing LED industry.
Light-emitting diodes, or LED, which consume less energy and last longer than incandescent and fluorescent lights, are seeing more demand in products like televisions and lighting fixtures as costs for power generation and concerns about greenhouse gas emissions rise.
Sapphire is used as a substrate in the LED industry.
"Sapphire production is a rapidly growing, complex process that the company sees as equivalent to where polysilicon was several years ago," analysts at Raymond James wrote in a note.
"Several wafer companies have been looking to get into the space, and GT Solar anticipates filling an open niche for a merchant player in the market, combining its upstream silicon expertise with Crystal Systems' sapphire knowledge," the analysts said.
GT Solar said it would pay Crystal Systems about $24 million in cash and issue 5.4 million shares. The company's Thursday close of $6.25 puts the stock portion of the deal at about $33.8 million.
The deal, which is expected to add to GT Solar's operating income over the next 18 months and to earnings per share by year-end 2012, also has a $21 million cash earn-out provision.
That Crystal Systems is a profitable company, is a "major plus," Raymond James analysts said. Crystal Systems currently expects revenue of about $16 million for the 2010 calendar year.
Following the deal, Fred Schmid, founder of Crystal Systems, will join GT Solar.
GT Solar shares rose 3.7 percent to $6.48 in afternoon trade. The stock has had a roller-coaster ride following its debut on the Nasdaq in 2008, having fallen more than 60 percent since. (Reporting by Adveith Nair, editing by Matthew Lewis and Gunna Dickson)
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