Newspaper article St Louis Post-Dispatch (MO)

Chip Supplier to Go Public Memc of St. Peters Makes Silicon Wafers

Newspaper article St Louis Post-Dispatch (MO)

Chip Supplier to Go Public Memc of St. Peters Makes Silicon Wafers

Article excerpt

MEMC Electronic Materials Inc., a St. Peters company that supplies silicon wafers to the world's biggest computer-chip makers, said Thursday it plans to sell stock to the public.

The German-owned company was created in 1989 when Veba AG of Germany bought Monsanto Co.'s electronic materials business and combined it with its own Dynamit Nobel Silicon SpA unit.

Veba said it intends to sell up to 45 percent of MEMC in the offering. Veba, through its Huels Corp. subsidiary, would retain majority ownership.

MEMC is the world's second-largest manufacturer of the silicon wafers used to make the semiconductors that power computers and all kinds of other equipment.

The company employs more than 5,500 people worldwide at plants in the United States, Italy, Japan and Malaysia. About 2,000 of those work at its St. Peters factory, which is the company's largest plant.

MEMC earned $34 million last year on sales of $660.8 million. With its plants at or near their capacity, the company is in the midst of a major expansion to help it compete with its mostly Japanese rivals.

MEMC controls about 20 percent of the $4.5 billion-a-year international market for silicon wafers. That is second only to Japan's Shin Ersu Handotai, which has about 23 percent to 25 percent of the market worldwide.

Although MEMC has yet to disclose exactly how many shares it intends to sell and at what expected price, a registration statement filed with the Securities and Exchange Commission in Washington estimates that the total amount to be raised would be about $370 million.

If that is the case, then MEMC's initial public offering could become the biggest in recent St. Louis history - even larger than the $250 million initial stock offering from papermaker Jefferson Smurfit Corp. last year.

MEMC said it intends to use the proceeds of the offering to pay off $275 million worth of debt - including $125 million to its parent - and to get it started on an aggressive growth plan it estimates will cost $700 million through 1997. …

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