Israeli Orbotech firm sold for $3.4 billion
Following Mobileye sale, Israeli semiconductor equipment maker Orbotech sold to American firm KLA-Tencor for $3.4 billion; company employs 2,500 people, said to keep its Yavne headquarters; 'Orbotech will continue operating as a single unit under the Orbotech brand,' says company CEO Asher Levy.
Israeli hi-tech firm Orbotech Ltd. was bought by the American KLA-Tencor company, the two companies stated Monday, finalizing a $3.4 billion deal for the semiconductor equipment maker, giving KLA-Tencor access to the fast-growing market for printed circuit boards and flat panel displays.
KLA-Tencor, whose stock-in-trade is different semiconductor manufacturing processes, announced it put pen to paper on purchasing Orbotech stocks in a combo cash and stock deals.
KLA-Tencor's offer price of $69.02 per share, comprising $38.86 in cash and 0.25 of its stock, represents a premium of about 15 percent to Orbotech's closing price of $59.90 on Friday.
Israel-based Orbotech's shares were up 11 percent at $67.00 in premarket trading, KLA was down nearly 1 percent at $119.50.
The return on the deal reflects a $3.4 billion market value for the Israeli firm, which today is said to be $2.9 billion.
The deal will diversify California-based KLA-Tencor's revenue base and add $2.5 billion of addressable opportunity in the market for printed circuit boards, flat panel displays, packaging and semiconductor manufacturing, the company said.
Orbotech CEO Asher Levy said that, "Orbotech will continue operating as a single unit under the Orbotech brand, and the company's headquarters will continue to be located in Yavne."
As of early 2017, Orbotech employs 2,500 workers. The company's stock has climbed 87 percent in the past 12 months, and 19.5 percent since 2018 began.
"The purchase deal is further proof of Orbotech's positioning in the markets in which it operates, and is a testament to the strength of its business model," Levy added, saying, "The agreement between the two companies significantly boosts the joint company's chances to successfully tackle the mass waves of investment expected in the world of electronics in the next few years. This linkage will improve our employees' future and create immense economic value for our shareholders.
"Joining KLA will also significantly enlarge Orbotech's growth potential by allowing us to leverage KLA's technological mobility to accelerate our own product development program, and to improve the range of solutions we are able to offer our clients."
KLA-Tencor CEO Richard Wallace stated, "The purchase is wholly compatible with our strategy seeking continuous, profitable growth by expanding into adjacent markets with high growth rates.
"KLA and Orbotech are tow companies with unusually compatible outlooks on the way they view people, processes, technologies and worldwide deployment, thereby allowing together a host of significant new opportunities for growth and expanding (our) product portfolio.
"Integration between the companies will strengthen our position in the growing semiconductor field, will significantly expand our presence in the Chinese market—which is growing ever more important—while also developing new opportunities for the integrated company in advanced printed circuit boards and flat panel displays.
"Moreover, KLA's years' long, vigorous presence in Israel will be significantly expanded, and our activities in Israel—which we consider one of the main technological hubs—will continue comprising a large portion of KLA."
Mickey Greenfeld, of Calcalist, contributed to this report.