ATMI (ATMI) Acquires Full Control of SDS Rights for $95 Million
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ATMI, Inc. (Nasdaq: ATMI) has taken control of, and responsibility for, worldwide distribution of ATMI's proprietary Safe Delivery Source, or SDS, gas storage and delivery system and related technologies from Matheson Tri-Gas, Inc. The two companies have signed an agreement that terminates Matheson's license, manufacturing, and distribution agreement in exchange for a $95 million cash payment.
CFO Tim Carlson stated: "The transaction will be highly accretive and is expected to generate $7-8 million of incremental product revenues and $0.08-0.09 of incremental earnings per diluted share on a quarterly basis, beginning in the second quarter of 2012. Over the fourth quarter of 2011 and the first quarter of 2012, revenue will be impacted by reversals related to previously recognized product shipments into the Matheson distribution channel, as well as inventory burn in regions where Matheson will continue to sell the product until ATMI secures the appropriate licenses and permits to fully conduct business. The expected unfavorable impact on revenues over the combined next two quarters could be up to $16 million, when compared to the expected post-transaction revenue level. Additionally, under existing accounting rules, we expect to take a one-time contract termination charge of approximately $80-$85 million in the fourth quarter, subject to completion of our fair value analysis."
CFO Tim Carlson stated: "The transaction will be highly accretive and is expected to generate $7-8 million of incremental product revenues and $0.08-0.09 of incremental earnings per diluted share on a quarterly basis, beginning in the second quarter of 2012. Over the fourth quarter of 2011 and the first quarter of 2012, revenue will be impacted by reversals related to previously recognized product shipments into the Matheson distribution channel, as well as inventory burn in regions where Matheson will continue to sell the product until ATMI secures the appropriate licenses and permits to fully conduct business. The expected unfavorable impact on revenues over the combined next two quarters could be up to $16 million, when compared to the expected post-transaction revenue level. Additionally, under existing accounting rules, we expect to take a one-time contract termination charge of approximately $80-$85 million in the fourth quarter, subject to completion of our fair value analysis."
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