WJ to Sell Semiconductor Equipment Business to Silicon Valley Group

In a move to improve profitability, Watkins-Johnson (WJ; Palo Alto, CA) has inked a definite agreement to sell its Semiconductor Equipment Group (SEG) to Silicon Valley Group for a total value, including retained receivables, exceeding $50 million.

Under the agreement, WJ is selling its atmospheric pressure chemical vapor deposition products (APCVD) and related real estate to Silicon Valley Group. In return, Silicon Valley Group will deliver cash as well as assume $20 million of WJ's long-term debt.

WJ's definite agreement, comes two months after the company signed a non-binding letter with Silicon Valley Group ( Silicon Valley Group to Buy WJ Semiconductor Equipment Business). This letter, which was signed in early March, was the start to Silicon Valley's acquisition of WJ's semiconductor equipment operations.

The WJ/Silicon Valley Group agreement is subject to satisfaction of customary conditions, including compliance with Hart-Scott-Rodino. It is expected to be complete by the end of June.