U.S. chipmaker KLA-Tencor has signed a $3.4 billion agreement to acquire Israel's Orbotech, which provides technology, solutions and equipment for electronics manufacturing, in another multi-billion dollar exit for the Israeli high-tech industry.
Orbotech announced on Tuesday that KLA-Tencor has agreed to purchase Orbotech stock for about $69.02 per share, giving Orbotech an equity value of $3.4 billion and an enterprise value of $3.2 billion.
The purchase is slated to be completed 12 to 18 months after the deal is closed.
According to a press release from Orbotech, the purchase will "significantly diversify" KLA-Tencor's revenue base and increase its market opportunities in the fields of high-growth printed circuit boards, flat panel displays, packaging, and semiconductor manufacturing.
"This acquisition is a true testament to Orbotech's strong leadership and success," said Orbotech CEO Asher Levy.
"I firmly believe that this deal benefits our employees and creates additional value for our shareholders. Together with KLA-Tencor, we will significantly increase growth potential, accelerate our product development roadmap, and enhance customer offerings.
"Orbotech will continue to operate under the Orbotech brand as a standalone business of KLA-Tencor based in Yavne, [central] Israel."
KLA-Tencor President and CEO Rick Wallace said the acquisition is "consistent with our strategy to pursue sustained, profitable growth by expanding into adjacent markets."
Wallace said, "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."
Attorney Yariv Kedem, an expert in technology law, told Israel Hayom on Tuesday that "the sale proves once again the centrality of Israel in the world of global technology.
"The fact that Orbotech's activity is staying in Israel is a Zionist act in every sense. There are incentives to move business activity out of Israel – first, the cost of technological labor, which is cheaper in places like India, or taxes, which are lower in other countries. This keeps foreign companies out of Israel or forces the Israeli government to give them heavy tax breaks, as in the case of Teva [Pharmaceuticals]. Nevertheless, Orbotech is staying here, which means that whoever handled the negotiations deserves a pat on the back," Kedem said.
