Sumitomo to Expand Cryocooler Business by Acquiring APD in the US

January 08, 2002

Sumitomo Heavy Industries, Ltd. (President: Yoshio Hinoh) has agreed to buy 100% of the stock of IGC-APD Cryogenics Inc. (V.P. and GM David C. Dedman; hereinafter called "APD"), a specialist manufacturer of cryocoolers operating as a subsidiary of the U.S. firm Intermagnetics General Corporation (CEO and President: Glenn H. Epstein; hereinafter "IGC"). The stock is to be transferred from IGC early in February this year.

As Sumitomo forges ahead with its full-fledged structural changes, the company is making selective investments and acquiring new companies to expand its involvement in precision-control machines and high value-added component businesses. The company has been making especially aggressive inroads into today's ultra-advanced cryocooler technologies. Through our fosterage of the cryocooler business, Sumitomo already holds the top position in the world market for cryocoolers in the field of medical MRI. Our newest acquisition of IGC-APD Cryogenics will make us the world leader in another ultra-advanced cryocooler technology, creating opportunities for a new branch of high-profit business.

Through aggressive investment in R&D and our global service system, Sumitomo hopes to triple the sales of its cryogenic division, working together with ADP over the next three years.

Sumitomo already holds the world's most advanced technologies and largest market share in GM refrigerator operating at the 4 Kelvin level (-269°C), and also Starling Coolers. In the next few years, this market is expected to expand substantially with the further application of superconductivity technology and analyses devices. In addition to cryocoolers for medical MRI, we are developing high value-added products for communication and semiconductor manufacturing equipment. APD is a leading manufacturer of GM refrigerator at the 10 K (-263°C) level, and the company's cryopumps for semiconductor manufacturing equipment and next-generation technologies are highly valued in the industry. Before the acquisition, Sumitomo and APD vied fiercely to become the frontrunner in Pulse Tube Refrigerator-the cryocooler technology of the coming generation.
By capitalizing on our synergistic relations in areas such as research and development, production, sales, and service, Sumitomo and APD hope to offer solutions to customers operating in a wider range of businesses than ever.

Working with our resources pooled, Sumitomo and APD will command an especially strong R&D force with a newly formed team of more than fifty design development engineers in the cryocooler business. In the realms of sales and service, the two companies will operate six service locations in Japan, U.S., and Europe, offering optimal solutions to customers in those three regions.

An overview of APD
(1) Head office: Allentown, Pennsylvania, U.S.
(2) President: Glen H. Epstein
(3) Capital: Approx. \670,000,000
(4) Line of business:
Manufacture and sales of cryocoolers for MRI, cryopumps, cryocoolers for measuring instruments, and analysis equipment.
(5) Business office:
Sales, development, and manufacturing divisions at head officeSales and service offices on the west coast of the U.S.Sales and service subsidiary in England
(6) Sales: Approx. \2,000,000,000

Cryocooler applications
MRI for medical use, biochemical analyzers including NMR, infrared detection devices, cryopumps, semiconductor manufacturing equipment, and communication equipment

Intermagnetics General Corporation (IGC)
(1) Head office: Latham, New York, U.S.
(2) President/CEO: Glenn H. Epstein
(3) Line of business: Superconductive power transfer equipment and superconductive magnets for medical use
(4) Scale of business: Total sales in fiscal 2001 ... Approx. \18,000,000,000

This merger will give IGC the means to form a new supply chain for its MRI magnet production business positioned downstream from its cryocooler business. Sumitomo has concluded a contract to supply APD's cryocoolers, parts, and customer service for six years to come.