MKS Instruments Inc.: 10-K Risk Factor Changes

The acquisition of Atotech Limited (“Atotech”) in August 2022 (the “Atotech Acquisition”) significantly increased our size, including with respect to revenue, product offerings, number of employees and facilities, and geographic exposure. Atotech's products and technology, and certain of its markets and customer base, are significantly different from our historical experience. In particular, we did not have previous experience in the specialty chemistry industry, which Atotech serves. Atotech's chemistry business is also subject to highly complex environmental regulations, across multiple jurisdictions around the globe, and may expose us to significant additional liabilities for past or future activities. Integrating Atotech's business and operations with ours has been and will continue to be complex, challenging and time-consuming and has required and continues to require significant efforts and expenditures, and we may not be able to achieve the integration in an effective, complete, timely or cost-efficient manner. Other potential risks related to the Atotech Acquisition include our ability to: •Expand our financial and management controls and reporting systems and procedures to integrate and manage Atotech; Expand our financial and management controls and reporting systems and procedures to integrate and manage Atotech; •Integrate our information technology (“IT”) systems to enable the management and operation of the combined business; Integrate our information technology (“IT”) systems to enable the management and operation of the combined business; •Realize expected synergies resulting from the Atotech Acquisition during our expected timeframe; Realize expected synergies resulting from the Atotech Acquisition during our expected timeframe; •Maintain and improve Atotech's operations; Maintain and improve Atotech's operations; •Retain and expand Atotech's customer base while aligning our sales efforts; Retain and expand Atotech's customer base while aligning our sales efforts; •Avoid lost revenue resulting from the distraction of our personnel as a consequence of the Atotech Acquisition and ongoing integration efforts; Avoid lost revenue resulting from the distraction of our personnel as a consequence of the Atotech Acquisition and ongoing integration efforts; •Retain key Atotech personnel; Retain key Atotech personnel; •Recognize and capitalize on technology enhancement opportunities presented by our combined businesses; Recognize and capitalize on technology enhancement opportunities presented by our combined businesses; •Develop sufficient knowledge of Atotech's products and technology and certain of its markets and customer base such that we can manage Atotech's business effectively; and Develop sufficient knowledge of Atotech's products and technology and certain of its markets and customer base such that we can manage Atotech's business effectively; and •Successfully integrate our respective corporate cultures such that we achieve the benefits of acting as a unified company. Successfully integrate our respective corporate cultures such that we achieve the benefits of acting as a unified company. Other potential risks related to the Atotech Acquisition include: •Operating in geographies that are new to us, and increasing our exposure to high-risk geographies; Operating in geographies that are new to us, and increasing our exposure to high-risk geographies; •The assumption of unknown or contingent liabilities, or other unanticipated events or circumstances; and The assumption of unknown or contingent liabilities, or other unanticipated events or circumstances; and •The potential to incur or record significant cash charges, such as integration and restructuring, or non-cash charges, such as the write down of the carrying value of fixed assets, intangible assets and goodwill obtained in the Atotech Acquisition, which could adversely impact our cash flow or lower our earnings in the period or periods for which we incur such charges or write down such assets. The potential to incur or record significant cash charges, such as integration and restructuring, or non-cash charges, such as the write down of the carrying value of fixed assets, intangible assets and goodwill obtained in the Atotech Acquisition, which could adversely impact our cash flow or lower our earnings in the period or periods for which we incur such charges or write down such assets. For example, as described in Note 13 to the Notes to Consolidated Financial Statements, following triggering events at each of our electronics (“EL”) and general metal finishing (“GMF”) reporting units, which together represent the Atotech business and constitute our Materials Solutions Division (“MSD”), we recorded goodwill and intangible asset impairments at MSD of $1.3 billion during the quarter ended June 30, 2023 and, following an annual impairment analysis of all our reporting units, we recorded goodwill and intangible asset impairments at MSD of $62 million during the quarter ended December 31, 2023. These impairments were in part due to softer industry demand, particularly in the personal computer and smartphone markets, that negatively affected MSD’s revenues and operating results. If we are unable to successfully or timely integrate the operations of Atotech's business into our business, we may be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the Atotech Acquisition and our business could be adversely affected. Additionally, we have incurred and will continue to incur transaction-related costs. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset certain transaction and integration-related costs over time, this net benefit may not be 13 13 achieved in the near term, or at all. Further, we may not realize the expected benefits from the Atotech Acquisition, including the revenues and operating results we anticipate. Any of the foregoing risks could materially harm our combined business, financial condition and results of operations.