Filed by Lam Research Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: KLA-Tencor Corporation
Commission File No.: 000-09992
Dear Valued Customer:
I am writing to share some exciting news about the next step in the evolution of our company. Today we announced an agreement for Lam to combine with KLA-Tencor, creating an industry leader ideally equipped to deliver a new paradigm of collaboration and innovation to increase our contributions to your success. This complementary combination of Lams best-in-class capabilities in deposition, etch, and clean with KLA-Tencors leadership in inspection and metrology unites two companies with close product adjacency and competencies, increasing our technical scale and capability.
The decision to combine our two companies occurs at a time of transformation for both of our respective industries. As we have all experienced, the complexity facing this industry continues to increase, requiring greater innovation and collaboration in order to meet the demands of industry scaling. This is the vision driving our combination with KLA-Tencor and you have our commitment to execute on this vision.
As a combined company we aspire to deliver unmatched capability, creating more choices and solutions for you in process and process control. In partnership with you, we plan to deliver enhanced value, by reducing variability and accelerating yield, harnessing the strengths of our collective capabilities.
We believe exciting opportunities exist at the intersection of process and process control, with the transition to 3D device architectures, multi-patterning imaging, advanced packaging integration schemes, and next-generation memory solutions driving the need for innovative and productive process solutions at the atomic level. We are confident that our ability to better meet your needs will be accelerated by the combination of best in class process performance with industry leading metrology, inspection and analytical capability.
As we embark on this journey, we act with one singular focus: to remain a trusted supplier to enable and contribute more to your success. Over the past several years, I have benefitted greatly from strategic discussions with your company and sincerely hope that continues. That very dialogue has framed the combination we announced today. I would respectfully ask your assistance in creating an even closer partnership to ensure we are developing a comprehensive value proposition supporting long-term success for you, our valued customer.
The transaction is subject to customary regulatory approval and approval from our stockholders, and we expect it to close mid calendar 2016. Given Lams and KLA-Tencors common focus on technology and execution and commitment to customer support, I commit to you a smooth and seamless transition. Until closing, it will continue to be business as usual at Lam and KLA-Tencor. You should expect the same high level of service and quality you have come to expect from our team. If you have any questions, please do not hesitate to contact me.
I thank you for your support of Lam and look forward to discussing how we can continue to meet your needs in the future while pursuing new opportunities together.
Forward Looking Statements
All statements included or incorporated by reference in this document, other than statements or characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Lams and KLA-Tencors current expectations, estimates and projections about its respective business and industry, managements beliefs, and certain assumptions made by Lam and KLA-Tencor, all of which are subject to change. Forward-looking statements can often be identified by words such as anticipates, expects, intends, plans, predicts, believes, seeks, estimates, may, will, should, would, could, potential, continue, ongoing, similar expressions, and variations or negatives of these words. Examples of such forward-looking statements include, but are not limited to: (1) references to the anticipated benefits of the proposed transaction; (2) the expected industry leadership, future technical capabilities and served markets of the individual and/or combined companies; (3) projections of pro forma revenue, cost synergies, revenue synergies, cash flow, market share and other metrics, whether by specific market segment, or as a whole, and whether for each individual company or the combined company; (4) market expansion opportunities and systems and products that may benefit from sales growth as a result of changes in market share or existing markets; (5) technological achievements that may be realized by the combined company, (6) the allocation of merger consideration in the transactions; (7) the financing components of the proposed transaction; (8) potential financing opportunities, together with sources and uses of cash; (9) potential dividend growth rates; and (10) the companies ability to achieve the closing conditions and the expected date of closing of the transaction.
These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially and adversely from those expressed in any forward-looking statement. Important risk factors that may cause such a difference in connection with the proposed transaction include, but are not limited to, the following factors: (1) the risk that the conditions to the closing of the transaction are not satisfied, including the risk that required approvals for the transaction from governmental authorities or the stockholders of KLA-Tencor or Lam are not obtained; (2) litigation relating to the transaction; (3) uncertainties as to the timing of the consummation of the transaction and the ability of each party to consummate the transaction; (4) risks that the proposed transaction disrupts the current plans and operations of KLA-Tencor or Lam; (5) the ability of KLA-Tencor and Lam to retain and hire key personnel; (6) competitive responses to the proposed transaction and the impact of competitive products; (7) unexpected costs, charges or expenses resulting from the transaction; (8) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (9) the combined companies ability to achieve the growth prospects and synergies expected from the transaction, as well as delays, challenges and expenses associated with integrating the combined companies existing businesses; (10) the terms and availability of the indebtedness planned to be incurred in connection with the transaction; and (11) legislative, regulatory and economic developments, including changing business conditions in the semiconductor industry and overall economy as well as the financial performance and expectations of Lams and KLA-Tencors existing and prospective customers. These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that Lam will file with the Securities and Exchange Commission (SEC) in connection with the proposed transaction. Investors and potential investors are urged not to place undue reliance on forward-looking statements in this document, which speak only as of this date.
Neither Lam nor KLA-Tencor undertakes any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances. Nothing contained herein constitutes or will be deemed to constitute a forecast, projection or estimate of the future financial performance of Lam, KLA-Tencor, or the merged company, whether following the implementation of the proposed transaction or otherwise.
In addition, actual results are subject to other risks and uncertainties that relate more broadly to Lams overall business, including those more fully described in Lams filings with the SEC including its annual report on Form 10-K for the fiscal year ended June 28, 2015, and KLA-Tencors overall business and financial condition, including those more fully described in KLA-Tencors filings with the SEC including its annual report on Form 10-K for the fiscal year ended June 30, 2015.
Additional Information and Where to Find It
This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The proposed transaction will be submitted to the stockholders of each of Lam and KLA-Tencor for their consideration. Lam intends to file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement/prospectus of Lam and KLA-Tencor. Each of Lam and KLA-Tencor will provide the joint proxy statement/prospectus to their respective stockholders. Lam and KLA-Tencor also plan to file other documents with the SEC regarding the proposed transaction. This document is not a substitute for any prospectus, proxy statement or any other document that Lam or KLA-Tencor may file with the SEC in connection with the proposed transaction. Investors and security holders of Lam and KLA-Tencor are urged to read the joint proxy statement/prospectus and any other relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the proposed transaction. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SECs website (www.sec.gov). In addition, investors and stockholders will be able to obtain free copies of the joint proxy statement/prospectus and other documents filed with the SEC by Lam on Lams Investor Relations website (investor.lamresearch.com) or by writing to Lam Research Corporation, Investor Relations, 4650 Cushing Parkway, Fremont, CA 94538-6401 (for documents filed with the SEC by Lam), or by KLA-Tencor on KLA-Tencors Investor Relations website (ir.kla-tencor.com) or by writing to KLA-Tencor Corporation, Investor Relations, One Technology Drive, Milpitas, California 95035 (for documents filed with the SEC by KLA-Tencor).
Participants in the Solicitation
Lam, KLA-Tencor, their respective directors, and certain of their respective executive officers, other members of management and employees, may, under SEC rules, be deemed to be participants in the solicitation of proxies from Lam and KLA-Tencor stockholders in connection with the proposed transaction. Information regarding the persons who, under SEC rules, are or may be deemed to be participants in the solicitation of Lam and KLA-Tencor stockholders in connection with the proposed transaction will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find more detailed information about Lams executive officers and directors in its definitive proxy statement filed with the SEC on September 21, 2015. You can find more detailed information about KLA-Tencors executive officers and directors in its definitive proxy statement filed with the SEC on September 24, 2015. Additional information about Lams executive officers and directors and KLA-Tencors executive officers and directors will be provided in the above-referenced Registration Statement on Form S-4 when it becomes available.