MILPITAS, Calif. and YAVNE,
Israel, March 19, 2018 /PRNewswire/ -- KLA-Tencor
Corporation (NASDAQ: KLAC) ("KLA-Tencor") and Orbotech
Ltd. (NASDAQ: ORBK) ("Orbotech") today announced they have
entered into a definitive agreement pursuant to which KLA-Tencor
will acquire Orbotech for $38.86 in
cash and 0.25 of a share of KLA-Tencor common stock in exchange for
each ordinary share of Orbotech, implying a total consideration of
approximately $69.02 per share. The
transaction values Orbotech at an equity value of approximately
$3.4 billion and an enterprise value
of $3.2 billion. In addition,
KLA-Tencor announced a $2 billion
share repurchase authorization. The share repurchase program is
targeted to be completed within 12 to 18 months following the close
of this transaction.
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With this acquisition, KLA-Tencor will significantly diversify
its revenue base and add $2.5 billion
of addressable market opportunity in the high-growth printed
circuit board ("PCB"), flat panel display ("FPD"), packaging, and
semiconductor manufacturing areas. The broader portfolio of
leading products, services, and solutions, as well as increased
exposure to technology megatrends, will support KLA-Tencor's
long-term revenue and earnings growth targets.
"This acquisition is consistent with our strategy to pursue
sustained, profitable growth by expanding into adjacent markets,"
commented Rick Wallace, President
and Chief Executive Officer of KLA-Tencor. "This combination will
open new market opportunities for KLA-Tencor, and expands our
portfolio serving the semiconductor industry." Mr.
Wallace continued, "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."
"This acquisition is a true testament to Orbotech's strong
leadership and success," said Asher
Levy, Chief Executive Officer of Orbotech Ltd. "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."
Mr. Levy added, "Orbotech will continue to operate under
the Orbotech brand as a standalone business of KLA-Tencor
based in Yavne, Israel."
Total cost synergies are expected to be approximately
$50 million on an annualized basis
within 12 to 24 months following the closing of the transaction,
and the transaction is expected to be immediately accretive to
KLA-Tencor's revenue growth model, non-GAAP earnings and free cash
flow per share.
The transaction has been approved by the Board of Directors of
each company and is expected to close before the end of calendar
year 2018, subject to approval by Orbotech's shareholders, required
regulatory approvals and the satisfaction of the other customary
closing conditions. No approval by KLA-Tencor stockholders is
required. The transaction is not subject to any financing
conditionality. KLA-Tencor intends to fund the cash portion of the
purchase price with cash from the combined company's balance sheet.
In addition, KLA-Tencor intends to raise approximately $1 billion in new long-term debt financing to
complete the share repurchase.
J.P. Morgan acted as exclusive financial advisor to KLA-Tencor;
Wilson, Sonsini, Goodrich & Rosati acted as KLA-Tencor's U.S.
legal counsel; and Meitar, Liquornik, Geva, Lesham, Tal acted as
KLA-Tencor's Israeli legal counsel.
Barclays acted as exclusive financial advisor to Orbotech;
Cravath, Swaine & Moore LLP acted as Orbotech's U.S. legal
counsel; Tulchinsky, Stern, Marciano, Cohen, Levitski & Co.
acted as Israeli legal counsel; and Goldman Sachs acted
as special advisor to Orbotech's transaction committee.
About KLA-Tencor:
KLA-Tencor Corporation, a leading provider of process control
and yield management solutions, partners with customers around the
world to develop state-of-the-art inspection and metrology
technologies. These technologies serve the semiconductor and other
related nanoelectronics industries. With a portfolio of
industry-standard products and a team of world-class engineers and
scientists, the company has created superior solutions for its
customers for more than 40 years. Headquartered in Milpitas,
Calif., KLA-Tencor has dedicated customer operations and
service centers around the world. Additional information may
be found at www.kla-tencor.com. (KLAC-F)
About Orbotech:
Orbotech is a leading global supplier of yield-enhancing and
process-enabling solutions for the manufacture of electronics
products. Orbotech provides cutting-edge solutions for use in the
manufacture of printed circuit boards (PCBs), flat panel displays
(FPDs), and semiconductor devices (SDs), designed to enable the
production of innovative, next-generation electronic products and
improve the cost effectiveness of existing and future electronics
production processes.
Forward-Looking Statements
This press release contains forward-looking statements as
defined in the Securities Exchange Act of 1934 and is subject to
the safe harbors created therein. These forward-looking statements
involve risks and uncertainties that could significantly affect the
expected results and are based on certain key assumptions. Due to
such uncertainties and risks, no assurances can be given that such
expectations will prove to have been correct, and readers are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. The
forward-looking statements contained herein include, but are not
limited to, the manner in which the parties plan to effect the
transaction, including the share repurchase program; the ability to
raise additional capital necessary to complete the repurchase
program within the time frame expected; the expected benefits,
synergies and costs of the transaction; management plans relating
to the transaction; the expected timing of the completion of the
transaction; the parties' ability to complete the transaction
considering the various closing conditions, including conditions
related to regulatory and Orbotech shareholder approvals; the
plans, strategies and objectives of management for future
operations; product development, product extensions, product
integration, complementary product offerings and growth
opportunities in certain business areas; the potential future
financial impact of the transaction; and any assumptions underlying
any of the foregoing. Actual results may differ materially from
those referred to in the forward-looking statements due to a number
of important factors, including but not limited to the possibility
that expected benefits of the transaction may not materialize as
expected; that the transaction may not be timely completed, if at
all; that KLA-Tencor may not be able to successfully integrate the
solutions and employees of the two companies or ensure the
continued performance or growth of Orbotech's products or
solutions.
In addition, other risks that KLA-Tencor faces include those
detailed in KLA-Tencor's filings with the Securities and Exchange
Commission, including KLA-Tencor's annual report on Form 10-K for
the year ended June 30, 2017 and
quarterly report on Form 10-Q for the quarter ended December 31, 2017. Other risks that Orbotech
faces include those detailed in Orbotech's filings with the
Securities and Exchange Commission, including Orbotech's annual
report on Form 20-F for the year ended December 31, 2017.
Additional Information and Where to Find It
This press release is being made in respect of a proposed
business combination involving KLA-Tencor and Orbotech. This
press release does not constitute an offer to sell or the
solicitation of an offer to buy or subscribe for any securities or
a solicitation of any vote or approval nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. The proposed transaction will be submitted to the
shareholders of Orbotech for their consideration. KLA-Tencor
intends to file with the SEC a Registration Statement on Form S-4
that will include a preliminary prospectus with respect to
KLA-Tencor's common stock to be issued in the proposed transaction
and a proxy statement of Orbotech in connection with the merger of
an indirect subsidiary of KLA-Tencor with and into Orbotech, with
Orbotech surviving. The information in the preliminary proxy
statement/prospectus is not complete and may be changed.
KLA-Tencor may not sell the common stock referenced in the proxy
statement/prospectus until the Registration Statement on Form S-4
becomes effective. The proxy statement/prospectus will be
provided to the Orbotech shareholders. KLA-Tencor and
Orbotech also plan to file other documents with the SEC regarding
the proposed transaction.
This press release is not a substitute for any prospectus,
proxy statement or any other document that KLA-Tencor or Orbotech
may file with the SEC in connection with the proposed transaction.
Investors and security holders of KLA-Tencor and Orbotech are urged
to read the proxy statement/prospectus and any other relevant
documents that will be filed with the SEC carefully and in their
entirety when they become available because they will contain
important information about the proposed transaction.
You may obtain copies of all documents filed with the SEC
regarding this transaction, free of charge, at the SEC's website
(www.sec.gov). In addition, investors and security holders will be
able to obtain free copies of the proxy statement/prospectus (when
they become available) and other documents filed with the SEC by
KLA-Tencor on KLA-Tencor's Investor Relations page
(ir.kla-tencor.com) or by writing to KLA-Tencor Corporation,
Investor Relations, 1 Technology Drive, Milpitas, CA 95035 (for documents filed with
the SEC by KLA-Tencor), or by Orbotech on Orbotech's Investor
Relations page (investors.Orbotech.com) or by writing to Orbotech
Ltd., Investor Relations, 7 Sanhedrin Boulevard, North Industrial
Zone, Yavne 8110101 Israel (for documents filed with the SEC by
Orbotech).
Conference Call and Webcast Details
KLA-Tencor
will hold a conference call Monday, March
19 at 6:00 a.m. PT (9:00
a.m. ET) to discuss this announcement. The conference call
can be joined by dialing 1-866-787-1003, Conference ID 5679896,
within the U.S. and 1-678-276-8164, Conference ID 5679896, for all
other locations. To access the webcast, visit the Investor
Relations section of KLA-Tencor web site
at http://www.kla-tencor.com and click on the Events
section to view the details. A webcast replay will be available on
KLA-Tencor web site approximately three hours after the conference
call concludes.
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SOURCE KLA-Tencor Corporation