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KLA-Tencor Announces $11.50 All Cash Offer for August Technology
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SAN JOSE, Calif., Feb. 9, 2005--KLA-Tencor Corporation (NASDAQ: KLAC) today announced it has sent a letter to the Board of Directors of August Technology Corporation (NASDAQ: AUGT) proposing to acquire August Technology for $11.50 per share in cash. This proposal follows offers made privately in December 2004 and January 2005, prior to August Technology's announcement of a merger agreement with Nanometrics Inc. KLA-Tencor's offer represents a compelling value to the shareholders of August Technology and, as of Tuesday's market close, translates to an approximate 34 percent premium over the value implied by the merger agreement with Nanometrics and an approximate 13 percent premium over the proposal from Rudolph Technologies. KLA-Tencor's proposal is subject to the negotiation and execution of a definitive merger agreement.

"We have the highest regard for August Technology and its employees, and believe that the acquisition of August Technology by KLA-Tencor serves the best interests of our respective shareholders and customers," said Ken Schroeder, president and chief executive officer of KLA-Tencor. "For the shareholders of August Technology, this offer represents a significant premium, while the shareholders of KLA-Tencor can look forward to realizing important synergies and growth from new market opportunities. Finally, customers of both companies can anticipate more comprehensive solutions in the future, while August Technology customers will quickly realize advantages from KLA-Tencor's large global service and support network. Our offer would also provide minimal integration risk and uninterrupted customer support."

This combination will leverage the complementary strengths of both organizations. KLA-Tencor is the leader in process control and yield management in the wafer fab arena, while August Technology is better known for its leadership in inspection solutions for the advanced packaging market. This acquisition will bring KLA-Tencor expertise, resources and technology to the full semiconductor fabrication cycle from wafer processing to device packaging, thereby accelerating both the overall demand for and the development of comprehensive next-generation solutions.

KLA-Tencor expects to fund the proposed transaction from its existing cash balance, and the merger would not have a financing condition. KLA-Tencor is prepared to meet immediately with the Board of August Technology to negotiate and execute a definitive merger agreement.

Forward Looking Statements: Information in this release relating to KLA-Tencor's prospects are "forward-looking statements," and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations, and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: inability to successfully complete the transaction described in this release or realize the anticipated benefits of the transaction; delays or cancellations of orders by customers; shipments or acceptances; inability by the company to meet its production and/or product development schedules; the demand for semiconductors; and new and enhanced product offerings by competitors. For a description of other factors that may cause actual results to differ from those projected, please refer to KLA-Tencor's Form 10-K, Forms 10-Q and other filings with the Securities and Exchange Commission. Actual results could differ materially from those anticipated in forward-looking statements in this release as a result of certain factors, including those set forth in the risk factors described in the company's SEC filings. All forward-looking statements are based on management's estimates, projections and assumptions as of the date hereof. KLA-Tencor undertakes no obligation to update these forward-looking statements.

Information regarding certain KLA-Tencor Persons: KLA-Tencor is not currently engaged in a solicitation of proxies or consents from its shareholders or from the shareholders of August Technology. However, in connection with its proposal to merge with August Technology, certain directors and executive officers of KLA-Tencor may participate in meetings or discussions with KLA-Tencor shareholders, some of whom may also be August Technology shareholders or other persons who may also be August Technology shareholders. KLA-Tencor does not believe that any of these persons is a "participant" as defined in Schedule 14A promulgated under the Securities Exchange Act of 1934, as amended, in the solicitation of proxies or consents, or that Schedule 14A requires the disclosure of certain information concerning any of them. Information concerning the directors and executive officers of KLA-Tencor and a description of their interests in KLA-Tencor is set forth in KLA-Tencor's proxy statement filed with the Commission on October 1, 2004. As of the date of this press release, KLA-Tencor and its directors and executive officers beneficially own, in the aggregate, 4.2% of August Technology's common stock. If, in the future, KLA-Tencor engages in solicitation of proxies from its shareholders or the shareholders of August Technology in connection with a merger of the companies it will amend the information provided above as needed to disclose the information concerning participants in that solicitation required by Rule 14a-12 under the Securities Exchange Act of 1934.

About KLA-Tencor: KLA-Tencor is the world leader in yield management and process control solutions for semiconductor manufacturing and related industries. Headquartered in San Jose, Calif., the company has sales and service offices around the world. An S&P 500 company, KLA-Tencor was named one of the Best Managed Companies in America for 2005 by Forbes Magazine and is the only company in the semiconductor industry to receive the accolade for this year. KLA-Tencor is traded on the Nasdaq National Market under the symbol KLAC. Additional information about the company is available on the Internet at http://www.kla-tencor.com

Contact:
Meggan Powers
Director Corporate Communications

 

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