Atlas Copco to buy cryogenics business from Brooks in $675 million deal

STOCKHOLM (Reuters) - Swedish compressor and vacuum pump maker Atlas Copco ATCOa.ST is buying U.S.-based Brooks Automation's BRKS.O cryogenic business in a $675 million cash deal to expand its vacuum technology portfolio, the companies said late on Monday.

A Atlas Copco company logo is pictured at the "Bauma" Trade Fair for Construction, Building Material and Mining Machines and Construction Vehicles and Equipment in Munich, southern Germany, April 11, 2016. REUTERS/Michael Dalder/File Photo

The deal is Atlas Copco’s biggest since the 2014 acquisition of Britain’s Edwards Group, the base for its current Vacuum Technique business area.

Brooks’ cryogenic business, which makes advanced pumps used to remove water vapor and hydrogen in many semiconductor and industrial processes, has about 400 staff and had sales of around $195 million in the last 12 months.

The acquisition also includes Brooks Automation’s 50 percent share of Ulvac Cryogenics, Inc., a joint venture which had total sales of around $100 million in the fiscal year ending in June.

“The acquisition of Brooks Automation’s cryogenic business gives us access to new technologies and products and complements our current offering for semiconductor chamber solutions,” Atlas Copco Vacuum Technique head Geert Follens said in a statement.

Atlas Copco’s vacuum unit’s has grown rapidly in recent years, boosted by its high exposure to the semiconductor industry where an exponential rise in global data volumes is driving demand for microchips.

Vacuum Technique is also highly profitable, reaching a 25.3 percent operating margin last year.

However, lately investors have been fretting about slowing growth in the business area, which in July warned of somewhat lower demand for vacuum equipment from the semiconductor industry in the short term due to slower spending at some of its biggest semiconductor clients.

Vacuum Technique's client list includes Samsung 005930.KS, TSMC 2330.TW, as well as Dutch group ASML ASML.AS, while competitors include Germany's Pfeiffer Vacuum PV.DE.

Atlas Copco said the deal was expected to be completed during the first quarter of 2019, subject to regulatory approvals.

Reporting by Johannes Hellstrom; editing by Niklas Pollard