MKS Instruments to offload $1bn chemicals unit to focus on chips

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.MKS Devices, a provider to Taiwan Semiconductor Manufacturing Firm, is promoting a $1bn speciality chemical substances division in a bid to focus its operations on supplying chipmakers, in accordance with individuals conversant in the matter. The Massachusetts-based know-how group, which specialises in superior manufacturing gear essential to the semiconductor provide chain, is working with advisers to divest the division, which it acquired as a part of its $5.1bn takeover of Atotech in 2021. The unit, which generates about $100mn in adjusted earnings a 12 months, focuses on supplying know-how used to use coatings and finishes to vehicles and industrial gear. MKS will maintain on to the rest of the division that gives gear used to supply semiconductors and circuit boards.MKS is making an attempt to promote traders on how the increase in synthetic intelligence and different applied sciences will drive a surge in demand for its manufacturing devices, which it says are important to the subsequent wave of innovation. The corporate provides semiconductor giants equivalent to TSMC, Utilized Supplies and Lam Analysis.Each its semiconductor and electronics divisions delivered income progress above analyst projections in the latest quarter. John Lee, MKS chief government, stated on an earnings name in August that the double-digit progress in its electronics and packaging arm was “validating MKS’s place in a market the place advanced electronics purposes like AI are driving progress”. MKS declined to remark. Shares in MKS stood at $121.3 every at Friday’s shut, up 14.4 per cent this 12 months, giving it a market worth of $8.3bn. A big selection of strategic consumers and personal fairness teams had been approached as a part of the public sale, the individuals stated. The sale course of was at a complicated stage, however there have been no ensures {that a} deal shall be clinched, they added. Personal fairness teams have jumped on comparable carve-outs in current weeks. This month, Carlyle struck a €7.7bn deal to take management of BASF’s coating unit, as a part of which the German chemical substances big will retain a minority stake. Earlier than MKS struck a deal to purchase Atotech, Carlyle owned 79 per cent of the excellent shares.