Merrimack firm GT Advanced Technologies inks $336 million deal to equip Malaysian factory
MERRIMACK — GT Advanced Technologies on Tuesday announced a $336 million agreement with a Malaysian firm to provide equipment and technology for a new factory that would produce polysilicon, a key component of solar panels and semiconductors.
The project developer, Cosmos Chemicals and Mining based in Kuala Lampur, needs to line up financing for the $1.6 billion project, which would be built in the coastal city of Bintulu and produce 25,000 metric tons of polysilicon annually.
GTAT, with headquarters in Merrimack, develops polysilicon production equipment, along with its well-known “sapphire” materials used in LED lighting, optical applications and for components on mobile devices.
News of the deal with Cosmos Chemicals comes just months after GTAT announced a $578 million agreement with Apple to purchase sapphire for its camera lenses and other components of the iPhone 5S.
The company’s stock, which was trading below $5 a share before the Apple deal was announced, hit $17 a share on Tuesday, in a wild ride that has seen values go from $2.63 to as high as $18 over a 52-week period.
The $336 million deal with Cosmos Chemicals exceeds GTAT’s total revenue of $300 million in 2013, although it remains to be seen if the chemical company will get the financing it needs. If it does, a GTAT spokesmen said the deal would generate orders over a one- to three-year construction period.
“You don’t get the revenue until you actually install the equipment,” said company spokesman Jeff Nestel-Patt, speaking from corporate headquarters in Merrimack.
The growth at GTAT, founded in Nashua in 1994, has enhanced the state’s reputation as a high-tech hub, but has not generated a lot of jobs in New Hampshire. Corporate headquarters along with research and development operations are located in Merrimack, with about 190 employees.
Apple and GTAT are partnering on a new plant in Arizona to handle the sapphire deal, while work on the Malaysian contract will take place at the company’s Missoula, Mont., location. GTAT employs about 500 worldwide, with locations in the U.S. and Asia. The sapphire materials business is based in Salem, Mass.
GTAT designs and supervises the installation of the equipment for making polysilicon, but does not actually build the machinery. That work is done by third-party manufacturing partners.
The Cosmos Chemicals plant would be one of the largest in Asia, and is expected to start production in 2016. The National Bank of Abu Dhabi is the chief financial adviser and lead financier.
“This is certainly one of the largest deals ever for GTAT,” said Nestel-Patt.
The combination of the Apple and Cosmos deals has analysts bullish on the New Hampshire company.
“We expect that 2014 will be a transformational year for GT,” said company President and CEO Tom Gutierrez in a conference call with analysts on Feb. 24, “a year in which we build a sapphire materials business while continuing to invest in the new technologies that will drive our equipment revenues in 2015 and beyond.”