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ATMI Hires Barclays to Explore Options as Stock Surges

Barclays Plc
ATMI Inc. hired Barclays Plc to sound out potential buyers. Photographer: Chris Ratcliffe/Bloomberg

ATMI Inc., facing a shrinking customer list for its semiconductor and display materials businesses, hired Barclays Capital to explore strategic options.

The possibilities include a sale of the Danbury, Connecticut-based company, which may fetch $1 billion, said a person familiar with the matter, who asked not to be named because the discussions are private. There’s no guarantee that the process will lead to a transaction, ATMI said in a statement today. The stock jumped 5.6 percent.

ATMI Chief Executive Officer Douglas Neugold has sought to cut costs after demand for the company’s materials waned in some markets such as microelectronic wafers. ATMI said in October that third-quarter operating profit dropped 46 percent to $11 million as sales declined 7.9 percent to $100.2 million.

A combination with another company makes sense as it would allow ATMI to offer clients a wider range of products, said Patrick Ho, an analyst for Stifel Nicolaus & Co. in Dallas. Samsung Electronics Co., Taiwan Semiconductor Manufacturing Co. and Intel Corp. are increasingly dominating spending on equipment, forcing their suppliers to get together to avoid missing out on a decreasing number of larger orders, he said.

Narrower Base

“The further you go down the supply chain, the less leverage you have,” said Ho, who covers companies that supply the chipmaking industry. “It’s becoming a narrower base of who the big spenders are.” Ho said ATMI, which he doesn’t cover directly, would do better in combination with a peer that either supplies raw materials or parts for chipmaking equipment.

Neugold said Oct. 23 he’s confident that industry growth will result in improved orders for ATMI as companies it serves prepare to increase production for technological advances.

ATMI shares rose to $28.88 in New York after Bloomberg first reported that the company was exploring a sale. That extended the stock’s gain this year to 38 percent, giving ATMI a market value of almost $920 million.

Other companies producing solutions and materials for circuit boards and flat panels include Aurora, Illinois-based Cabot Microelectronics Corp., with a market value of about $950 million, and AZ Electronic Materials SA, based in Luxembourg, currently worth 1.08 billion euros ($1.46 billion).

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