Israel's Orbotech buys US-based Photon Dynamics for $290M
Deal between quality control manufacturing companies to close by late 2008. Orbotech’s deputy VP of Business, Strategy Asher Levy: 'During the last 13 months, Orbotech has made three purchases bringing technology into Israel'
The Israeli company Orbotech Ltd., which makes equipment used in inspecting circuit boards and flat display screens, is about to make the largest purchase in its history: The company will purchase the US-based Photon Dynamics Inc. company, which makes flat-screen production tools for the LCD industry.
The buying price is estimated at $290 million, and will be financed through a combination of internally generated funds and bank loans – divided equally. The purchasing price includes a premium of 35% over the stock's Wednesday closing price of $11.56.
The merging of the two firms is subject to the standard deal-closing provisions, including the approval of Photon Dynamics’ shareholders as well as regulatory endorsements. The deal is expected to close in the second half of 2008.
Photon ended its quarter in March with a 224% revenue hike, up to $45.1 million, showing a net profit of $3.9 million. Orbotech ended its first quarter with $202 million in cash.
Although both Photon and Orbotech work in the field of flat-screen testing equipment, the two companies are not competitors, and the purchasing deal will enable both companies to offer a comprehensive graduated solution in the flat-panel industry, enabling a synergy between them.
Orbotech’s Executive Vice President for Business and Strategy Asher Levy said: “This is a strategic deal and a reference point to Orbotech’s development and history. During the last 13 months, Orbotech has made three purchases bringing technology into Israel, instead of the other way round.”
According to Orbotech’s CEO Rani Cohen, “the synergy between the technological and infrastructural abilities of both companies will allow for a significant improvement in quality control production as well as other future production capabilities.
"This integration will enable us to take advantage of more opportunities that are available or will soon become available in the flat-screen industry, based on our existing and future abilities. All of these will be an added-value to our customers and will be beneficial to both our employees and our shareholders.”
