Illinois Concern to Buy Deposition Technology
Deposition Technology, a seven-year veteran in the emerging field of applying metals on thin films, on Tuesday said it agreed to be acquired by an Illinois company for $25 million in notes.
Material Sciences Corp., an Elk Grove Village, Ill.-based developer of advanced materials technologies, will buy 100% of Deposition Technology’s common stock for $25 million principal amount convertible subordinated notes.
The debt is payable in five annual installments beginning January, 1991, at 2% below the prime rate. In three years, the notes are convertible into Material Sciences common stock at $25 per share. Its stock trades now between $14 and $15 per share.
The management of San Diego-based Deposition Technology and its 100 employees will remain in place, according to Chairman and Chief Executive O. Morris Sievert, who joined Deposition Technology in July.
He replaced R.L. Burns, who, in an interview Tuesday, said he resigned to open his own oil and gas drilling company--RLB Energy.
Out of Retirement
Sievert, who came out of retirement in July, said he has agreed to stay at Deposition Technology “indefinitely, but certainly until I can put in place a replacement.”
Deposition Technology, founded in 1977, utilizes a process called “sputtering,” which applies thin metal films on substrates used for high-technology aerospace companies.
In June, the company’s advanced technology division was sold to Brunswick Corp.’s defense division for secret military applications.
Company officials said Tuesday that Deposition Technology will not initially contribute to Material Sciences earnings, although Sievert insisted that the potential applications of sputtering make his “a very exciting young company.”
“We haven’t yet discovered all the products and uses that will eventually evolve from sputtering technology,” said Sievert. Included in the current and potential uses are touch screens computers and telecommunications devices, heaters for microwave cooking, materials for photovoltaic cells, food packaging and photographic films, he said.
Sievert would not reveal Deposition Technology’s revenues or earnings. Material Sciences expects revenues of about $130 million per year, said Sievert.
Both Sievert and Burns served as top executives of Nucorp Energy, the once high-flying San Diego-based oil and gas firm that in 1982 filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
At the time of its collapse, Nucorp was reeling with $615 million in debt, having suffered from a depressed energy market. Shareholders later filed a class-action lawsuit charging fraud and mismanagement and the Securities and Exchange Commission later sued Burns, alleging he produced fraudulent financial statements by pre-billing revenue.
