Entegris: Bringing Integrity to Microchips

There are three IPOs planned for this week. Unfortunately, not all are
expected to have great performances. Then again, it is a holiday week.
Expect next week to be much better.

Sometimes slow weeks can bring some interesting IPO plays. One is
called Entegris. The company provides
materials management services to the semiconductor and disk manufacturing
marketplaces. Entegris assures the integrity of the materials as they pass
through many phases (handling, storage, processing, and transportation).
For example, wafer processing can take more than 500 steps and six weeks to
complete. If a batch of 25 wafers is lost, the cost can be more than $1 million.

As for the IPO, Entegris plans to issue 13 million shares between the price
range of $13-$15. The lead underwriter is Merrill Lynch.

Entegris is not a scrappy start-up; rather, it has been in business for
about 34 years. During this time, the company has become a leading player
in its industry.

In all, the company has eleven worldwide manufacturing facilities. In other
words, Entergris can meet the manufacturing needs of many companies. Customers
include IBM, Infineon, Intel, Seagate and Texas Instruments, as well as over
1,000 others.

The company does face serious competition. These companies include Asyst
Technologies, Kakizaki, Sanga Flantek, and Dainichi — just to name a

Interesting enough, Entegris has a 26.8% ownership stake in Metron
(semiconductor distributor), which had its IPO late last year. Although
the valuation is not huge: $165 million.

The semiconductor industry is subject to wide swings. In sympathy, Entegris
has also undergone the swings. But recently the semiconductor industry has
been surging. This has been very beneficial to Entegris. Sales increased
from $172 million for the first nine months of fiscal year 1999 to $247
million in the first nine months of fiscal year 2000. During this time, net
income went from $2.5 million to $35 million.

Such profitability, as well as the strength of semiconductors, may give a
boost to the Entegris IPO. It probably wont be a surge, but it may be a
fairly respectable jump.

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