Hitting a High-tech Jackpot

For high-tech Poly-Flow and its hundred-plus high-paying jobs, it was a case of the right owner who “really loved the market here” stepping in at the right time.

The precision cleaning equipment manufacturer for the semiconductor industry was rebounding nicely from a down year for its owner of six years, Ktech Corp., when defense giant Raytheon began negotiating to acquire Ktech — experts in pulsed power and directed energy — for its missile systems business.

The deal, however, was not to include Poly-Flow.

“The Poly-Flow business is so far outside the business of Raytheon, they didn’t want to inherit pieces that they would have to discard anyway,” Steve Downie, who now heads the Raytheon Ktech operation, told the Journal.

Enter Air Products, an Allentown, Pa., corporate heavyweight in its own right and, by winning a bidding process over two competitors, the new owner of Poly-Flow.

And like Raytheon, it plans to keep its new acquisition, along with its 100-plus jobs, right where it is in the Sandia Science and Technology Business Park. Raytheon and Air Products closed their deals with Ktech and Poly-Flow almost simultaneously earlier this summer.

Two heavyweights to ABQ

“Air Products is about a $10 billion ( a year) company and Raytheon a $25 billion company,” Downie said. “So two companies are coming to Albuquerque that otherwise would not have located here — and that’s a big deal for Albuquerque.”

Poly-Flow’s no newcomer to the high-tech world. Founded in 1974 in Sylmar, Calif., the company manufactures high-tech wet cleaning equipment for semiconductor companies and wafer fabricators.

“This is not for the wafers themselves, but as you can imagine, in semiconductor manufacturing, there are a number of parts and tubes that have to be used in the process,” said Curt Mitchke, the former Poly-Flow general manager, now director, EES Poly-Flow.

“When you have deposits or contaminants on those things, you have to clean them off before you can begin your next batch,” he said. “So we make a lot of the cleaning and support equipment that is involved in that.”

He said Poly-Flow had equipment in most of the large chipmakers around the world.

Poly-Flow Engineering came to Ktech’s attention in 2003 when Ktech was in discussions with a semiconductor manufacturer to design and build a chemical slurry system, Downie said.

‘A smokin’ deal’

“It was kind of weird that they turned out to be a company that does exactly that kind of tool building and so we went out and looked at them,” Downie said. “They were within a few weeks at that point in time of being foreclosed on, and so I thought, OK, we can do the design, but these guys already know how to build the equipment … so it was a perfect match.

“We bought them out of foreclosure, so we got a smokin’ deal,” Downie said. Poly-Flow then had about 50 employees and was doing $4 million of business a year. Ktech moved the operation — and about 15 Californians who elected to go with it — to the science and tech park in 2006 and brought Mitchke on board.

Expanding its product line to include equipment for medical and optical fiber industries as well as chemical management systems, Poly-Flow saw revenues rise from $10 million in 2006 to about $18.5 million in 2007 and 2008, with the workforce reaching about 92. Revenues slipped to about $14.5 million in 2009 but climbed back to $16.5 million in 2010.

Hiring pretty aggressively

“This year, we’ll about double that,” Mitchke said. “So we’ve been hiring pretty aggressively. We’re at around 110 right now and we’ve got another 15-20 employees to go yet.”

The company’s engineering department consists of mechanical, chemical, process, electrical, controls and materials engineers. Employees in the manufacturing operation make up more than 50 percent of the workforce, with varying educational backgrounds ranging from GED/high school diplomas to associates and bachelor’s degrees.

“We have far more non-degree positions within the company than degree positions,” Mitchke said.

There was no assurance a year ago that Poly-Flow would be staying in Albuquerque.

“The final deal and decision to move forward with the separation of the two companies happened in about the middle of 2010,” Mitchke said. “That’s when we went and tried to find buyers for the Poly-Flow part of it.”

Mitchke said the company received three viable offers, including from Air Products and another large company he declined to name. Although their bids were comparable, the other company was interested in breaking Poly-Flow into pieces and relocating them “far away from New Mexico,” he said.

Air Products, however, took a different view — and it impressed the Ktech board.

“They really loved the market here and there are customers within New Mexico that are part of their products portfolio,” Mitchke said. “I think we were successful in convincing them that the manufacturing we do here could not be done at any of their other facilities.”

‘Keeping the employees here’

He added, “I can’t speak for the board, but I think that what tipped the decision was keeping the employees here.”

“That’s exactly right,” Downie said.

Poly-Flow is now a part of Air Products electronics equipment solutions business, a $2 billion-a-year segment of the company’s business, according to Air Products spokesman Rob Brown.

“Our electronics business serves semiconductor, liquid crystal display, LED and equipment with gaseous materials and equipment and that’s where Poly-Flow fits within our equipment business,” Brown said.

Formed in 1940, Air Products employs more than 18,000 people in 40 countries, supplying a broad range of industries — including food and beverage, health and personal care and energy and transportation with atmospheric gases, process and specialty gases, performance materials, equipment and services.

“We’ve operated as a small privately held business, and as a big public corporation, a lot of things change,” Mitchke said. “The nice thing is Air Products has made a commitment to most of the employees, your role won’t be changing all that much. It is a very good acquisition from the employees’ perspective.”

It is also good for business, he said.

“As much as Ktech was a good parent company for Poly-Flow, the ability for our product to flow through down cycles in the semiconductor industry is a couple of orders of magnitude easier than it was for a smaller Ktech Corp.,” Mitchke said.