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20 February 2019

KLA completes acquisition of SPTS’ parent firm Orbotech

Process control and yield management solutions provider KLA-Tencor Corp of Milpitas, CA, USA has completed the acquisition of Orbotech Ltd of Yavne, Israel.

“This new combination extends KLA’s market reach within the electronics value chain, opens new high-growth markets for the company, and brings complementary technologies, products and services to our portfolio,” says KLA’s president & CEO Rick Wallace. “We welcome the talent and experience that Orbotech employees bring to the KLA team. Working together, we will continue to grow and invest in our future as we drive innovation and results.”

With the acquisition, KLA diversifies its revenue base and add $2.5bn of addressable market opportunity in the printed-circuit board (PCB), flat-panel display (FPD), packaging and semiconductor manufacturing areas. Its defect inspection and metrology products include systems for LED manufacturing. However, as well as providing yield-enhancing and process-enabling solutions for electronics production, Orbotech owns SPTS Technologies Ltd of Newport, Wales, UK (which manufactures etch, PVD and CVD wafer processing solutions for the MEMS, advanced packaging, LED, high-speed RF, and power management device markets). The broader portfolio of products, services and solutions, as well as increased exposure to technology megatrends, should support KLA’s long-term revenue and earnings growth targets, it is reckoned.

Orbotech shareholders received $38.86 per share in cash, and 0.25 of a share of KLA common stock in exchange for each ordinary share of Orbotech - a total of $65.93 per share, based on the $108.26 closing sale price of KLA common stock on the Nasdaq Global Select Market on 19 February.

The transaction is expected to be immediately accretive to KLA’s revenue growth model, non-GAAP earnings and free cash flow per share.

KLA will fund the cash portion of the purchase price with cash from the combined company’s balance sheet, and from borrowings from KLA’s existing revolving credit facility. As previously announced, in conjunction with this acquisition, the board of directors has authorized an additional $1bn share repurchase program. KLA intends to raise about $1bn in new long-term public debt to reduce other debt, to repurchase shares, and for general corporate purposes.

See related items:

KLA-Tencor to acquire SPTS’ parent firm Orbotech

Tags:  KLA-Tencor SPTS

Visit:  www.kla.com

Visit:  www.orbotech.com

Visit:  www.spts.com

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