KALISPELL - Semitool stock jumped 30 percent Tuesday, on word the longtime Kalispell company would be purchased by a California firm for an estimated $364 million cash offering.

In an early morning conference call, Semitool CEO Ray Thompson expressed his "complete support for this transaction," saying Applied Materials Inc. would provide a "great home" for his Montana company. Semitool jobs, he said, would remain in Kalispell, and the company would be stronger following the purchase by Applied.

"Our products are complementary," Thompson said, "and together we will be even better positioned" in the high-tech marketplace.

"We are extremely impressed with Semitool's people, products and technology," said Randhir Thakur, general manager of Applied Materials' Silicon Systems Group, "and we are committed to building on the foundations established by Ray Thompson. Semitool will remain in Kalispell, and be operated as a business unit of our Silicon Systems Group."

Richard Hegger, general counsel at Semitool, said management from both firms met Tuesday afternoon in Kalispell with workers, who were told "every Semitool employee will become an Applied Materials employee."

In addition, Hegger said, Semitool's chief operating officer, Larry Murphy, will be assigned as vice president for the newly created Kalispell division of Applied Materials.

Under the agreement - which has been approved by officers at both companies and should be complete by year's end - Applied Materials will buy Semitool stock at $11 per share, a 31 percent premium over Monday's closing price of $8.40.

To close the deal, at least two-thirds of Semitool stockholders must agree to sell. Currently, about 32 percent of Semitool stock is held by company directors and executives, who already have agreed to the terms of the sale.

Hegger said there was no reason to believe that the two-thirds majority would not be met, and said he'd already heard from several shareholders Tuesday afternoon.

"The response has been very positive," he said.

Applied Materials is the world's leader in building technology used in the computer microchip industry. Founded in 1967, the Silicon Valley firm went public in 1972, and in recent years has expanded into the solar-energy technology marketplace.

Last week, AMAT reported fourth-quarter net sales of $1.53 billion. But at the same time, the company announced a restructuring plan designed to save some $450 million, which includes cutting between 1,300 and 1,500 jobs (10 percent to 12 percent of Applied's total global work force) over the next 18 months.

How workers at Semitool might be affected remains unclear, but officers at Applied said the purchase offer was independent of the company's latest cost-cutting plans.

Semitool makes technology used to clean and prepare semiconductor wafers - essentially making the machines that make computer chips. Thompson, a Flathead Valley native, founded his company in 1978, and a year later moved it from Santa Ana, Calif., to Kalispell.

He currently employs more than 800 worldwide, with the majority - more than 500 workers - based at Semitool's Kalispell and Libby plants.

One year ago, amid an economic recession that collapsed global demand for computer microchips, management at Semitool announced substantial layoffs, and the company later called for a plantwide temporary shutdown.

The high-tech industry, however, now appears to be on the rebound, and both Semitool and Applied Materials management predicted the pending purchase would help them get out in front of competition as markets begin to expand.

"The potential sale," said Jonathan Davis, "is fairly consistent with overall trends in the industry. I'd say these companies may have been on a path toward merger for some time."

Davis is president of North American operations at SEMI, an industry analyst association. Both customers and suppliers, he said, are concentrating, as fewer but larger companies emerge from the recession.

Firms such as Applied, which have money to spend, are finding ready sellers in firms such as Semitool, which struggled during the industry slowdown.

"I wouldn't be at all surprised to see more of these mergers and purchases," Davis said. Companies, he said, are looking for efficiencies, "for opportunities up and down the supply chain," and are finding them in vertical integration and broader portfolios.

Of particular interest to Applied Materials is the "mobile" market, which requires very small and very powerful chips to drive tomorrow's technology.

Mike Splinter, CEO at Applied Materials, said the recovery of the semiconductor industry "is being fueled by global demand for mobile devices such as smart phones, notebook PCs and portable media players for music, gaming and books." Applied's purchase of Semitool, he said, "will help the world's leading chip makers create even smaller and more powerful devices."

In return, Thompson said, Applied can help take Semitool's expertise and technology worldwide. Both companies, he said, benefit by the deal.

"With this agreement," Thompson said, "we are providing our employees with a strong future, and our stockholders with exceptional value."

The companies, he said, have worked together on several projects over the past couple years, and share a common view of the trajectory in high-tech manufacturing.

The future of Semitool's latest initiative - building a better battery to store power from renewable energy operations - remains uncertain, although Applied's recent interest in solar panels could provide a nice fit, Davis said.

Word of the sale pushed Semitool stock nearly to the proposed $11 purchase price; shares traded Tuesday at $10.96, up sharply from Monday's $8.40 closing price and well above the one-year low of just $1.86.

The Kalispell company has, in recent months, enjoyed a strong recovery from last year's lows, and in October reported fourth-quarter orders totaling $71.7 million. That was more than double the third-quarter bookings of $32.6 million and nearly three times the second-quarter orders of $24.6 million.

The pending sale, Thompson said, should only bolster those increases, as the much larger Applied introduces Semitool's technology to new markets.

"Their muscle out there, I believe, will enhance our order rate considerably," Thompson said.

Reporter Michael Jamison can be reached at 1-800-366-7186 or at mjamison@missoulian.com.