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PRI Automation to Buy Promis Systems in $48 Million Stock Deal

PRI Automation’s 1998 agreement to buy Promis Systems would add semiconductor manufacturing-execution software to its factory-automation and wafer-flow capabilities.
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PRI Automation agreed in November 1998 to acquire Promis Systems Corporation Ltd., a Canadian maker of manufacturing-execution software for semiconductor factories. EDN reported a stock-for-stock deal valued at about $48 million using the companies’ share prices at the time; it was expected to close by the end of the first quarter of 1999, subject to conditions in the agreement.

What PRI Automation was buying

Promis Systems was a Toronto-based supplier of manufacturing execution systems (MES) for semiconductor manufacturing. MES software helps manage and coordinate production on the factory floor. PRI Automation, based in Billerica, Massachusetts, with additional operations in Mountain View, California, already provided factory-automation systems, software and services to semiconductor manufacturers and process-tool makers.

The acquisition was intended to add Promis’s production-management software to PRI’s logistics and wafer-flow capabilities, bringing more factory operations together in one offering.

Deal value, exchange ratio and expected timing

EDN reported that PRI planned to exchange 0.1691 PRI shares for each Promis share. At the companies’ then-current share prices, that represented about $4.29 per Promis share and put the transaction’s reported value at roughly $48 million. The dollar value was based on share prices at the time, not a fixed cash payment.

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The companies announced the agreement on November 25, 1998. Closing was expected by the end of the first quarter of 1999, subject to the agreement’s conditions. The SEC later catalogued the November 24, 1998 combination agreement and identified Promis Systems Corporation Ltd. as PRI Automation (Canada), Inc. after the arrangement.

Why PRI wanted Promis’s software

PRI’s strategic aim was to connect its wafer-flow and logistics capabilities with Promis’s MES software. PRI president and CEO Mitch Tyson said the acquisition “significantly enhances PRI Automation’s wafer-flow solution.” He also said the combined offering was intended to help manufacturers reduce cycle times, accelerate fab start-up and improve manufacturing flexibility—operational goals that can affect factory productivity and profitability.

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VLSI Research analyst Dan Hutcheson said the acquisition fit PRI’s vision of delivering complete factory-automation solutions. Promis president and CEO Ian McKinnon described the transaction as the best way to maximize value for Promis shareholders and customers, and said PRI was well positioned to serve the semiconductor industry worldwide.

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Part of a broader factory-software push

The deal came amid semiconductor-equipment suppliers’ efforts to expand into factory software. EDN cited Applied Materials’ agreement to acquire Consilium and Brooks Automation’s purchase of FASTech Integration as contemporaneous examples. The report establishes the industry context but does not provide complete valuation details for those transactions, so their deal values cannot be directly compared here.

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