Valuing Orbotech at $69.02 per share, USA based KLA-Tencor is set to buy Israel based Orbotech. Orbotech is an Israeli firm that develops ways to enhance manufacturing of electronic products and KLA-Tencor will buy Orbotech shares through a combination of cash and stock. This will value Orbotech at $3.4 billion.
According to Rick Wallace, KLA’s chief executive officer:
“This acquisition is consistent with our strategy to pursue sustained, profitable growth by expanding into adjacent markets. Our companies fit together exceptionally well in terms of people, processes, and technology.”
Over the past year Orbotech shares have doubled and KLA-Tencor share have risen 23 percent over the past year.
Israeli Prime Minister Benjamin Netanyahu, an evangelist for Israeli technology also said the following about the acquisition on his twitter feed and the continuation of operations of the company from Israel rather than moving its operations overseas:
“More good news for the hi-tech sector and the Israeli economy! I was happy to hear that the company, which employs 2,500 people, will continue to operate.”
The synergies from the deal are expected to be $50 million within two years of the deal closing and the deal is expected to close before the end of the year.
Orbotech CEO Asher Levy also added the following about the acquisition:
The deal “is further proof of Orbotech’s positioning in the markets in which it operates and the strength of its business model. The agreement between the companies significantly strengthens the chances of the joint company to successfully cope with the large investment waves expected in the coming years in the world of electronics.”
KLA-Tencor exclusive financial adviser was JPMorgan Chase & Co. while Orbotech were financially advised by Barclays Plc.
Founded in 1975, KLA-Tencor designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nano-electronics industries worldwide. Headquartered in the US and employing around 5990 employees, KLA- Tencor offers chip manufacturing products, such as front-end defect inspection tools, defect review systems, advanced packaging process control systems, metrology solutions, in-situ process monitoring products, and lithography software; wafer manufacturing products comprising wafer manufacturing products comprising surface and defect inspection, wafer geometry and nanotopography metrology, and data management; and reticle manufacturing products, such as defect inspection and pattern placement metrology products.
Headquartered in Israel, Orbotech. provides yield-enhancing and process-enabling solutions for the manufacture of printed circuit boards (PCBs), flat panel displays (FPDs), and semiconductor devices (SDs) in China, North America, Europe, Japan, Korea, and internationally. Founded in 1981 and employing around 2634 employees, Orbotech operates through three segments: Production Solutions for the Electronics Industry, Solar Energy, and Recognition Software.