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Tegal to Acquire Alcatel Micro Machining Systems DRIE and PECVD Products and Related IP

Published on September 3, 2008 at 10:40 AM

Tegal Corporation, a leading designer and manufacturer of plasma etch and deposition systems, today announced that it has signed an agreement with Alcatel Micro Machining Systems (AMMS) and Alcatel-Lucent to acquire their Deep Reactive Ion Etch (DRIE) and Plasma Enhanced Chemical Vapor Deposition (PECVD) products, and the related intellectual property, directed at advanced 3-dimensional wafer-level packaging applications. The restricted stock and cash deal, valued at US$5 million, is expected to close later this month. As part of the agreement, Gilbert Bellini, President of AMMS, will be appointed to Tegal’s Board of Directors.

The agreement calls for the continued support by AMMS of the existing installed base of DRIE tools in use by MEMS and integrated device manufacturers. Tegal will continue the development of the AMMS DRIE product line, including the integration of the AMMS process modules on its recently-introduced Compact™ bridge platform and the completion of a 300mm process chamber. In addition, Tegal will assume responsibility for AMMS’ joint development programs with key customers, as well as research and academic institutions.

“This is an important strategic move for Tegal,” said Thomas Mika, Chairman, President and CEO of Tegal. “These products, along with our current etch and deposition technologies, will form the basis for a comprehensive strategy to aggressively pursue a large, high growth market in MEMS and semiconductor device manufacturing. With this transaction, we believe that we can offer customers the best combination of leading-edge technology, customer support and proven systems for production applications.”

“Tegal is well-known for providing advanced processes and production tools to MEMS and semiconductor device manufacturers worldwide,” said Gilbert Bellini, President of AMMS. “I am proud to be associated with Tegal and pleased to work with the Company as a director to ensure the smooth transition of the AMMS business to Tegal in the near-term and to help guide Tegal into the rapidly expanding markets for 3D wafer level packaging applications.”

At closing, Tegal will pay to AMMS US$1 million in cash and US$ 4 million worth of newly issued shares of Tegal common stock. The number of shares to be issued will be equal to US$4,000,000 divided by the average of the closing sales prices of Tegal common stock for the five (5) consecutive trading days immediately prior to the closing date of the Acquisition. Completion of the transaction is subject to customary closing conditions, but parties expect to close the transaction on or about September 16, 2008.

Tegal’s senior management will conduct a conference call today at 5:00 p.m. EDT / 2:00 p.m. PDT to discuss the agreement between Tegal and AMMS. More information about the conference call is provided below.

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