KLA-Tencor Corporation of Milpitas, California has agreed to acquire Orbotech Ltd. of Yavne, Israel. Under the terms of the definitive acquisition agreement, KLA-Tencor will acquire the firm for $38.86 in cash and 0.25 of a share of KLA-Tencor common stock in exchange for each ordinary share of Orbotech for a total compensation of about $69.02 per share. The transaction places the equity value of the acquisition at around $3.4 billion and an enterprise value of $3.2 billion. Also, KLA-Tencor announced a $2 billion share repurchase authorization to be completed within 12 to 18 months following the transaction’s close.
KLA-Tencor partners with customers to develop inspection and metrology technologies and supplies solutions for process control and yield management.
Similarly, Orbotech provides yield-enhancing and process-enabling solutions for the production of electronics products. Orbotech also offers solutions for fabricating printed circuit boards (PCBs), semiconductor devices (SDs), and flat panel displays (FPDs).
Orbotech Acquisition to Add Products Including PCB, Flat Panel Displays, and Semiconductor Fabrication
KLA-Tencor says that the acquisition will diversify its product offerings adding to its portfolio in the growing sectors of printed circuit board (“PCB”), as well as flat panel displays, packaging, and semiconductor fabrication.
“This acquisition is consistent with our strategy to pursue sustained, profitable growth by expanding into adjacent markets,” commented Rick Wallace, President and CEO of KLA-Tencor. Mr. Wallace continued, “Our companies fit together exceptionally well in terms of people, processes, and technology. In addition, KLA-Tencor has had a strong presence in Israel over the years, and this combination further expands our operations in this important global technology region.”
Mr. Levy noted, “Orbotech will continue to operate under the Orbotech brand as a standalone business of KLA-Tencor based in Yavne, Israel.”
The board of each company has approved the acquisition, which is expected to close before the end of the calendar year. The acquisition is subject to approval by Orbotech’s shareholders and must meet the necessary regulatory approvals and satisfy other customary closing conditions. Consent from KLA-Tencor stockholders is not required.