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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 7, 1997
NOVELLUS SYSTEMS, INC.
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(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA
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(State or Other Jurisdiction of Incorporation)
000-1757 77-0024666
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(Commission File Number) (I.R.S. Employer Identification No.)
3970 North First Street, San Jose, CA 95134
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(Address of Principal Executive Offices) (Zip Code)
(408) 943-9700
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN REPORT
Item 2. Acquisition or Disposition of Assets.
On June 20, 1997, pursuant to that certain Asset Purchase Agreement
dated as of May 7, 1997, between the Registrant, as buyer, and Varian
Associates, Inc., a Delaware corporation ("Varian"), as seller, as amended by
that certain First Amendment to Asset Purchase Agreement dated as of June 20,
1997, between the Registrant and Varian (as so amended the "Asset Purchase
Agreement"), the Registrant purchased, itself or through certain of the
Registrant's wholly-owned subsidiaries, Varian's Thin Film Systems Business (the
"Business"), which includes, the development, manufacture and sale of products
for physical vapor deposition and chemical vapor deposition of thin films, for a
cash purchase price of $145.5 million, subject to adjustment based on a final
closing balance sheet currently being prepared (as adjusted, the "Purchase
Price"). Subject to adjustment as described above, the Purchase Price was paid
and the closing deliveries were made on June 20, 1997. However, the transfer of
the Business and the payment of the Purchase Price were deemed made and effected
as of June 13, 1997. Accordingly, the closing balance sheet and all adjustments
to the Purchase Price will be prepared and made as of June 13, 1997.
The assets included in the Business purchased by the Registrant,
include, among other things, the Business' accounts receivable, inventory,
fixed and tangible personal property (including, without limitation, all
machinery, equipment, supplies, tools, tooling, furniture, fixtures, hardware,
dies and spare parts), intangible personal property, contracts, and books and
records. The assets purchased by the Registrant also included certain
intellectual property used in the Business. In addition to the intellectual
property purchased by the Registrant, pursuant to a certain Cross-License
Agreement dated as of May 7, 1997 (the "Cross-License Agreement"), between
Varian and the Registrant, among other things, the Registrant was granted
certain licenses to use certain additional intellectual property owned by
Varian, and the Registrant granted to Varian certain licenses to use certain
intellectual property owned by the Registrant. Seller and the Registrant also
have entered into an agreement relating to certain expense reimbursement and
indemnification obligations of Seller with respect to certain pending
litigation involving certain of the assets sold to the Registrant pursuant to
the Asset Purchase Agreement.
In addition to the personal property assets acquired by the Registrant,
the Registrant also acquired Varian's interest as tenant in and to Varian's
lease (the "Lease") of certain real property in Palo Alto, California, from the
Leland Stanford Junior University, and all of the improvements and fixtures
located thereon (such improvements and fixtures, the "Facility"). Varian agreed
that, for a period of up to one year, Varian will provide to the Registrant
certain services required by Registrant to operate the Business at the Facility.
Varian also agreed to permit the Registrant, for a period of up to 24 months, to
share the use of certain other facilities of Varian where portions of the
Business are conducted.
In addition to the assets, the Registrant assumed certain liabilities
relating to the Business.
All of the assets acquired by the Registrant will continue to be used
by the Registrant in conducting the Business, as conducted when the same was
acquired by the Registrant, provided that the Registrant may transfer the
locations at which portions of the Business are presently conducted to different
locations.
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The Purchase Price paid at the closing was comprised of $80.5 million
paid from the Registrant's own working capital funds, and a $65 million loan
made to the Registrant pursuant to a Credit Agreement dated June 9, 1997, among
the Registrant, ABN AMRO Bank N.V., as agent, and a syndicate of lenders named
in such Credit Agreement. The Purchase Price was determined through arms-length
negotiations between the Registrant and Varian, which negotiations took into
account the Business' financial position, operating history, products,
intellectual property and other factors relating to the Business. There are no
material relationships between Varian and the Registrant or any of its
affiliates, any director or officer of the Registrant, or any associate of any
such director or officer, except that Richard A. Aurelio, Executive Vice
President of Varian is a member of the board of directors of the Registrant. Mr.
Aurelio was appointed to the board of directors of the Registrant in May 1997,
after the execution of the Asset Purchase Agreement (prior to amendment thereof)
and the Cross-License Agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired
The audited financial statements of the Thin Film Systems Business of
Varian Associates, Inc., are not yet completed. The required audited
financial statements will be filed with the Securities and Exchange
Commission within 60 days of the filing of this report on Form 8-K.
(b) Pro Forma Financial Information
The unaudited pro forma financial information of Novellus Systems, Inc.
and the Thin Film Systems Business of Varian Associates, Inc., are not
yet completed. The required unaudited pro forma financial information
will be filed with the Securities and Exchange Commission within 60
days of the filing of this report on Form 8-K.
(c) Exhibits
The Exhibit Index appearing on page 5 is incorporated herein by
reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NOVELLUS SYSTEMS, INC.
By: /s/ Robert H. Smith
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Robert H. Smith
Executive Vice President Finance and
Administration, Chief Financial Officer and
Secretary
Dated: July 7, 1997
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EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
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2.1 Asset Purchase Agreement by and between Varian 6
Associates, Inc. and Novellus Systems, Inc.
2.2 First Amendment to Asset Purchase Agreement by
and between Varian Associates, Inc. and Novellus
Systems, Inc.
2.3 Assignment and Assumption of Lessee's Interest in
Lease (Units 8 and 9, Palo Alto) and Covenants,
Conditions and Restrictions on Leasehold
Interests (Units 1-12, Palo Alto)
2.4 Sublease (Portion of Unit 9, Palo Alto)
2.5 Shared Use Agreement
2.6 Environmental Agreement
2.7 Cross-License Agreement between Varian
Associates, Inc. and Novellus Systems, Inc.
2.8 Parts Supply Agreement