SMT & Inspection | June 26, 2008
Orbotech buys Photon Dynamics for $290m
Israel based Orbotech Ltd. and Photon Dynamics, Inc. have signed a definitive agreement for Orbotech to acquire Photon Dynamics, a provider of test and repair systems for the liquid crystal (LCD) flat panel display industry.
Under the terms of the agreement, Orbotech will pay $15.60 per share in cash for all of the issued and outstanding shares of Photon Dynamics’ common stock, making an aggregate merger consideration value for the transaction of approximately $290 million. The acquisition will be financed through a combination of internally-generated funds and external-source financing. This acquisition, which is the largest by Orbotech to date, is a major part of Orbotech’s strategy for growth and diversification in its flat panel display business. “The synergies resulting from the integration of our two companies’ highly complementary skill sets, technologies and infrastructures will open the door to significant enhancements in FPD yield management and process control, and will create potential for other production capabilities in the future,” said Mr. Rani Cohen, Chief Executive Officer of Orbotech. “It will allow us to capitalize more comprehensively on current and emerging opportunities in the flat panel display industry, while building upon and further expanding our current range of solutions, all of which will bring added value to our customers and will benefit our employees and shareholders.” Mr. Cohen added: “Photon Dynamics has very talented employees with first-class expertise, and leading products that are widely recognized throughout the FPD industry. We believe that these assets, in addition to Photon Dynamics’ strong technical capabilities and its excellent customer relations, will benefit FPD customers and positively impact Orbotech’s long-term success.” Jeffrey A. Hawthorne, President and Chief Executive Officer of Photon Dynamics, stated: “We see this new venture as a very exciting opportunity to provide FPD customers with a one-stop-shop that offers a complete line of yield management solutions. By teaming up with Orbotech, which is committed to investing in innovative technologies, we will be able to grow the combined business and improve its competitive positioning as we face a maturing industry.” The Boards of Directors of both companies have approved the acquisition. The transaction is subject to customary conditions to closing, including approval by Photon Dynamics’ stockholders and requisite regulatory approvals, and is expected to close during the second half of 2008. Orbotech’s financial advisor on the transaction is Lehman Brothers Inc. and Photon Dynamics’ financial advisor on the transaction is Credit Suisse Securities (USA) LLC.