KLA-Tencor has offered $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 outstanding share.
This values Orbotech at $3.38 billion in equity and about $3.2 billion in enterprise value. In addition, KLA-Tencor has announced a $2 billion share repurchase scheme to be completed within 12 to 18 months following the close of this transaction.
The acquisition would diversify KLA-Tencor's revenue base and add $2.5 billion of addressable market opportunity in PCB, flat panel display. Packaging and semiconductor manufacturing, KLA-Tencor said.
"Our companies fit together exceptionally well in terms of people, processes, and technology," said Rick Wallace, CEO of KLA-Tencor, in a statement.
"Orbotech will continue to operate under the Orbotech brand as a standalone business of KLA-Tencor based in Yavne, Israel," said Asher Levy, CEO of Orbotech, in the same statement.
Both companies' board of directors has approved the deal, which is expected to close before the end of 2018, subject to approval by Orbotech's shareholders, required regulatory approvals and the satisfaction of the other customary closing conditions.
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