Eaton Corporation to take its semiconductor business public
CLEVELAND, OHIO… Eaton Corporation (NYSE:ETN) said today that its Board of Directors authorized a restructuring of its semiconductor equipment operations into its wholly owned subsidiary, Eaton Semiconductor Equipment, Inc., and an initial public offering by that subsidiary for less than 20 percent of its common stock. The offering, which is expected to occur in late June and is subject to market conditions, follows a previously announced evaluation of pursuing a public offering of this business.
Eaton also indicated that it subsequently would be evaluating alternatives for the most effective disposition of the remaining shares in the new company. A total separation of Eaton Semiconductor Equipment from Eaton Corporation is currently expected by the end of 2000.
"These transactions are intended to further our objective of maximizing value for shareholders, given the significant differences between Eaton Semiconductor Equipment and Eaton’s other businesses," said Stephen R. Hardis, chairman and chief executive officer of Eaton Corporation. "The purpose of the offering is to raise equity capital for Eaton Semiconductor Equipment and establish a public market for its common stock, thereby focusing market attention on the value of that business. As a stand-alone company, Eaton Semiconductor Equipment also will be better able to compete for talent in the employment marketplace by compensating employees with its own stock. We also hope this action will encourage investors to recognize the earnings growth we have experienced in our other businesses."
Eaton Semiconductor Equipment, headquartered in Beverly, Massachusetts, is the world's leading manufacturer of ion implantation equipment used to produce semiconductors, and is a global producer of dry strip, photostabilization and rapid thermal semiconductor equipment products that complement its ion implantation equipment and are used in the semiconductor manufacturing process. Eaton Semiconductor Equipment sales were $397 million in 1999 and it had operating profit of $31 million.
Eaton Corporation, with 1999 sales of $8.4 billion, is a global manufacturer of highly engineered products that serve industrial, vehicle, construction, commercial, aerospace and semiconductor markets. Principal products include hydraulic products and fluid connectors, electrical power distribution and control equipment, truck drivetrain systems, engine components, ion implanters and a wide variety of controls. Headquartered in Cleveland, Ohio, the company has 64,000 employees and 195 manufacturing sites in 23 countries.
This press release does not constitute an offer of any securities.