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UCT Agrees to Acquire Quantum Global Technologies, LLC

HAYWARD, Calif., — Ultra Clean Holdings, Inc.  a developer and supplier of critical subsystems for the semiconductor and display capital equipment industries, announced that it has signed an agreement to acquire Quantum Global Technologies, LLC (“QGT”). QGT is a global leader in ultra-high purity, sub-10nm outsourced tool chamber parts cleaning and coating services, tool part life extension, microcontamination analytical services and other optimization solutions to OEM and IDM customers.

“Building on our position as a leading supplier to the semiconductor capital equipment market, today marks a meaningful step in the execution of our longer-term growth strategy to pursue sustained, profitable and diversified growth,” said Jim Scholhamer, CEO. “Upon completion, this acquisition will expand UCT into an adjacent market and increase the served addressable market in our core semiconductor business. It will also provide an excellent platform for growth and consolidation. With increased scale, we will extend our leadership position, deliver a suite of innovative and cost-effective solutions for our customers, and drive profitable growth.”

QuantumClean® and ChemTrace® are divisions of QGT. QuantumClean engages directly with its semiconductor IDM, Foundry and OEM customers to achieve process improvements in next generation applications by providing ultra-high purity chamber parts, validated by ChemTrace, the industry leader in non-destructive part analytical verification. Partnering with QGT will enable customers to focus on core competencies while removing uncertainties from their process and reducing their total cost of ownership. QuantumClean and ChemTrace have established a global network of Advanced Technology Cleaning Centers® and microcontamination laboratories to bring their services to customers around the world.

“This transaction represents a terrific benefit for QGT customers, employees and stockholders,” said Scott Nicholas, President and CEO of QGT. “This is an exciting time in the semiconductor industry and, by leveraging our combined capabilities and service offerings, we will deliver a broader range of innovative solutions, further increasing the combined company’s strategic relevance to its customers. We look forward to working closely with UCT to ensure a smooth integration.”

Under the terms of the agreement, the total transaction value is approximately $342 million and is structured as an all-cash transaction. The transaction will be subject to post-closing balance sheet adjustments. Additional cash consideration, capped at $15 million, will be paid subject to QGT exceeding certain revenue targets in 2019. UCT intends to fund the transaction and refinance its existing indebtedness with a combination of available cash on hand and approximately $400 millionin committed debt financing. In 2017, QGT generated revenue of $217.9 million, net income of $22.0 million and Adjusted EBITDA (as defined below) of $50.5 million. The transaction is expected to be accretive to UCT’s net income on a non-GAAP basis beginning in the fourth quarter of fiscal 2018.

Closing is expected to be in the third calendar quarter of 2018, subject to customary conditions including the expiration or termination of the waiting period under the Hart Scott Rodino Act. The closing of the transaction is not conditioned on the receipt of financing by UCT. Barclays, in its role as lead bookrunner, has provided committed acquisition financing, subject to customary closing conditions precedent to funding. Needham & Company, LLC served as financial advisor to UCT and Davis Polk served as UCT’s legal advisor. Cowen served as financial advisor to QGT and Fox Rothschild LLP served as QGT’s legal advisor.

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