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Filed by Novellus Systems, Inc.
Pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed
filed pursuant to Rule 14a-12 of the Securities and Exchange Act of 1934, as
amended.
Commission File No.: 0-17157
Subject Company: Novellus Systems, Inc. and GaSonics International Corporation
Richard Hill: Good morning, ladies and gentlemen. Thanks for joining us on
such short notice. As most of you have read by now in our
press release, last evening we signed a definitive agreement
with GaSonics to acquire 100 percent of that company. I'm
here this morning with Asuri Raghavan, who is the President
and CEO of GaSonics, along with Bob Smith, the Novellus
Executive VP and Chief Financial Officer.
What we're going to do this morning is first outline the
deal, talk about the overall business strategy and then Mr.
Raghavan will talk about the business relative to GaSonics
and we'll then come back to me and we'll open it up for some
questions.
So first I'd like to turn it over to Bob Smith who will give
you the parameters of the deal and then I'll return to talk
about the business strategy.
Thanks very much.
Bob.
Bob Smith: Thank you, Rick. By now you should have seen our press
release concerning Novellus' acquisition of GaSonics
International. And some of our comments today during this
presentation and during the question and answer following,
which refer to our expectations, beliefs, hopes and other
anticipated future events, are forward looking statements.
Please keep in mind that the actual results could differ
materially from those projected in any of our forward
looking statements. And we've provided additional
information in today's press release. Our form 10-K for
Novellus in 1999 and previous form 10-Q's concerning factors
that could cause actual results to differ materially from
those in forward looking statements. If you do not have a
copy of the press release, the form 10-K or the form 10-Q,
we'd be happy to provide one to you.
Novellus will acquire all of the outstanding shares of
GaSonics, which are approximately 18 million shares in a
stock for stock merger transaction valued at $347 million
for the GaSonics shares. The total offer value would deduct
the net cash of $62 million of GaSonics resulting in the
transaction value to Novellus of approximately $285 million.
The time length to complete the transaction involves
regulatory filings such as Hart Scott Rodino and SEC filings
as well as shareholder votes regarding the transaction from
the shareholders of GaSonics. And the time line this would
bring an effective date in the merger sometime in the first
quarter of 2001. The accounting for the transaction will be
pooling of interest and it's expected that the earnings per
share effect of the transaction would be immediately
accretive and the 2001 accretion value would be in the range
of 5 to 9 cents per share of Novellus shares.
Thank you, and I'll turn the meeting back to Rick.
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R. Hill: Thanks, Bob. As most of you know, Novellus' strategy is to
focus on the interconnect. And we see one of the major
frontiers in continuing to increase the performance and
yields for our customer is in the area of strict clean and
surface preparation. We're pleased to have GaSonics become a
major cornerstone in our new newly formed surface
preparation group. Asuri Raghavan, who's a seasoned
executive, will become the executive vice president of our
surface preparation group, and John Chenault will remain the
Executive Vice President of our deposition group.
Now what does this acquisition bring to Novellus? First of
all, I believe it brings a seasoned executive as well as
other seasoned talent and management talent from GaSonics
that truly understand the equipment business. It also brings
us solid technical talent and human resources focused on one
of the most important steps in the integrated circuit
process right prior to deposition. We've worked very closely
with GaSonics as part of the alliance to deliver copper to
our customer base and we believe that this strategic
acquisition offers significant growth opportunities for both
companies.
In addition, what we acquire is a profitable ongoing
business. We also acquire strong R&D and an emerging
application that we feel can have significant leverage in
our business and differentiate us from our competition. We
also acquire plant and facility which will help support the
growth of the combined entity.
Now what does Novellus provide to GaSonics? And I am sure
Mr. Raghavan will expand on this particular issue, but from
my perspective it provides to GaSonics a strong
infrastructure in sales, marketing and engineering to
enhance the positioning and sales of their existing
products, particularly in Asia. In addition, it provides
engineering expertise that will be made available to this
new surface preparation group to accelerate existing product
development and new product development which will bring
science and technology and productivity to a segment of the
business that is fast becoming the yield and performance
limiter to our customers. In addition, Novellus has the
capital and the balance sheet with over a billion dollars in
cash to help rapidly expand this business.
Now let me reiterate our strategy. We're focused on advanced
interconnects. And this is just the first step that we see
in becoming and continuing to maintain our leadership in
innovation of advanced interconnects.
Now let me turn it over to Asuri Raghavan who is more
conveniently known as Rags.
Rags.
Asuri Raghavan: Thanks, Rick. [Inaudible] this is a great opportunity for
GaSonics and Novellus. For those of you who follow GaSonics,
I'd like to, before I make my comments, I'd like to remind
you that we are in our quiet period and our fiscal Q-4 and
fiscal year 2000 results will be released next week. And my
comments that follow should be viewed in that context.
Those of you who follow us also know that we are leaders in
photoresist removal and residue removal technology. We've
innovated, we've introduced new technology, specifically
with our radio products which are focused on dry [inaudible]
cleans, copper and locate dielectrics. This is a market that
is rapidly evolving to be a technology player.
This acquisition helps us in a few ways. First, in terms of
infrastructure. GaSonics has a very strong presence in the
U.S. and in Europe, over 70 percent of our business comes
from these two regions. Novellus, on the other hand,
accounts the three Asian boundary groups in it's top ten
list of customers, and therefore, what we hope to do is to
leverage GaSonics' very strong technology and product
presence with an extraordinarily strong
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distribution system in Asia, and this should help the
company to rapidly proliferate our presence into the Asian
customer base.
Second, the engineering bench strength of Novellus is
legendary. And the hugely successful vector product is just
the latest example. GaSonics is also, over the last few
years, introduced a variety of new process technology. Our
radio product is one example. Our acquisition and induction
of the Gamma Precision Products team into the company is
another. And this union between the two companies enables us
to focus on bringing new products and new technologies to
the customer. Existing technologies and products will get
into the market much more rapidly and new products will be
developed from an inventory of development that should
enable us to be first into the market and take advantage of
that early presence.
Over the long term, of course, we expect to be the core of
the surface preparation group. And the resulting benefits to
customers in terms of new products and new technologies will
evolve and become apparent as time goes by.
With that, I'll turn it over back to Rick.
R. Hill: Thanks, Rags. As we reported, this will be an accretive
transaction from the get-go. It's strategically important
for Novellus and offers growth opportunities, not only for
the business that we've acquired but also our deposition
business as we build strategic differentiation in preparing
the surface prior to deposition. We've already been working
together through the alliance and this will enhance the
working relationship in such a way that we believe we can
accelerate our growth into these new markets.
Q & A Now, with that, I'd like to open it up for any questions
that you might have.
Closing Remarks
R. Hill: Thank you very much for joining us at this early hour. We
believe that this acquisition is a major opportunity for
Novellus and for the employees and people of GaSonics as
well as the shareholders of GaSonics. And we look forward to
future quarters where we can announce positive results for
you.
Thanks very much, and we'll talk to you at the end of the
fourth quarter.
Thanks very much.
YOU ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS TO BE
INCLUDED IN THE NOVELLUS SYSTEMS, INC. REGISTRATION
STATEMENT ON FORM S-4 IN CONNECTION WITH THE TRANSACTION TO
BE FILED WITH THE SEC WHEN IT IS AVAILABLE BECAUSE THE PROXY
STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT ON FORM
S-4 WILL CONTAIN IMPORTANT INFORMATION. YOU CAN GET COPIES
OF THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION
STATEMENT ON FORM S-4, AND ANY OTHER RELEVANT DOCUMENTS, FOR
FREE AT THE SEC'S WEB SITE AND COPIES OF OUR REPORTS, PROXY
STATEMENTS AND OTHER INFORMATION REGARDING US FILED WITH THE
SEC ARE AVAILABLE FREE FROM US. REQUESTS FOR DOCUMENTS
RELATING TO US SHOULD BE DIRECTED TO NOVELLUS SYSTEMS, INC.,
4000
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N. FIRST STREET, SAN JOSE, CA 95134, ATTENTION: INVESTOR
RELATIONS (408) 823-4823. REQUESTS FOR DOCUMENTS RELATING TO
GASONICS INTERNATIONAL CORPORATION SHOULD BE DIRECTED TO
GASONICS INTERNATIONAL CORPORATION, 404 EAST PLUMERIA DRIVE,
SAN JOSE, CA 95134-1912 ATTENTION: INVESTOR RELATIONS (408)
570-7391.
EXCEPT FOR THE HISTORICAL INFORMATION PRESENTED, CERTAIN
MATTERS DISCUSSED IN THIS PRESS RELEASE ARE FORWARD-LOOKING
STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH STATEMENTS.
FORWARD-LOOKING STATEMENTS IN THIS RELEASE INCLUDE
STATEMENTS REGARDING FINANCIAL FORECASTS, MARKET GROWTH
PREDICTIONS, LEADERSHIP POSITIONS, BRINGING NEW TECHNOLOGIES
AND PRODUCTS TO THE MARKET, AND THE LIKELIHOOD AND TIMING OF
CLOSING. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY INCLUDE RISKS AND UNCERTAINTIES SUCH AS THE
FAILURE OF GASONICS' TECHNOLOGY TO COMPLEMENT AND/OR BROADEN
NOVELLUS' CURRENT TECHNOLOGIES, THE ABILITY OF THE COMBINED
COMPANY TO CREATE ANTICIPATED SYNERGIES AND INCREASED
PRODUCT SALES AS A RESULT OF THE ACQUISITION, AND POSSIBLE
DIFFICULTIES IN COMBINING THE OPERATING PLANS AND SCIENTIFIC
CULTURES OF NOVELLUS AND GASONICS. THESE RISKS ARE DETAILED
FROM TIME TO TIME IN NOVELLUS' AND GASONICS' PUBLIC
DISCLOSURE FILINGS WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION (SEC), INCLUDING NOVELLUS' ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, NOVELLUS'
QUARTERLY REPORTS ON FORM 10-Q FOR THE FISCAL QUARTERS ENDED
MARCH 31, 2000, JUNE 30, 2000, AND SEPTEMBER 30, 2000,
NOVELLUS' REGISTRATION STATEMENT ON FORM S-3 FILED ON APRIL
5, 2000, AND NOVELLUS' FORM 8-K FILED ON APRIL 21, 2000,
GASONICS' ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 1999, GASONICS' QUARTERLY REPORTS ON
FORM 10-Q FOR THE FISCAL QUARTERS ENDED DECEMBER 31, 1999,
MARCH 31, 2000, AND JUNE 30, 2000, GASONICS' REGISTRATION
STATEMENTS ON FORM S-3 FILED ON APRIL 10, 2000 AND OCTOBER
3, 2000, AND GASONICS' FORM 8-K FILED ON SEPTEMBER 27, 2000.
COPIES OF NOVELLUS' AND GASONICS' PUBLIC DISCLOSURE FILINGS
WITH THE SEC ARE AVAILABLE FROM THEIR RESPECTIVE INVESTOR
RELATIONS DEPARTMENTS.
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