#KLATencor Corp. agreed to acquire #Orbotech Ltd., an Israeli firm that develops ways to enhance manufacturing of electronic products, to diversify its sources of growth. KLA will buy Orbotech for about $69.02 per share through a combination of cash and stock. That gives Orbotech an equity value of approximately $3.4bn and represents a 15% premium over Friday’s closing price in New York. Total cost synergies from the deal are expected to be $50m, reached within two years following the closing of the deal.
KLA-Tencor Buys #Israel's Orbotech at $3.4 Billion Valuation
3 days ago
#Orbotech, a maker of semiconductor -manufacturing equipment and one of #Israel’s biggest #hightech companies, is being sold to the American firm #KLATencor in a $3.4bn deal. The transaction will bring together two companies in the market for equipment that makes and inspects #semiconductors, printed circuit boards and flat panel displays. The market has taken off in recent years in line with the surge in smartphone use and, more recently, the internet of things and smart cars.
Orbotech got an important boost in the market after it acquired the U.K. company SPTS in 2014 for about $370m, expanding its product line from automated optical inspection systems to include equipment for the microelectronics industry. Orbotech shares had risen 3.7-fold since September 2015 through last Friday (Mar 16). #GrowthStrategy#Mergers#DealMaking#Takeovers#Acquisitions#Technology#MergersandAcquisitions#TechCompanies
Israel’s Orbotech to Be Sold to KLA-Tencor in $3.4 Billion Deal
After months of listening to #Broadcom say flattering things about #Qualcomm during its hostile takeover bid, it’s tempting to see Qualcomm as a prized jewel bursting with potential. But now that Broadcom’s pursuit has been permanently blocked due to national security concerns, it’s worth remembering that Qualcomm is a company with serious problems and an uncertain future.
Qualcomm said its revenues were impacted by its ongoing patent royalty dispute with Apple, one of its most important partners. Apple was upset about the royalty costs it had to pay for parts of its iPhones that touched Qualcomm’s patents. The company also noted that it was hit with a $1.2bn charge after the European Union ruled it had conspired with Apple to shut out competitors from the market for smartphone chips. In addition, it’s facing an $868m charge as the result of a fine imposed by the Korea Fair Trade Commission in Q1. And it incurred a $778m charge imposed by the Taiwan Fair Trade Commission in the previous quarter.
Qualcomm faces a challenging future despite dodging Broadcom’s bullet
7 days ago
Flagging #nationalsecurity concerns allows the US to avoid punishment under WTO rules for what most regard as a #protectionist measure. It has been seen as exploiting a loophole that risks undermining the #WTO if other countries respond similarly. The White House argued that #Broadcom's plans for #Qualcomm would lead to investment cuts, harming #America's ability to compete in #5G technology with Chinese rivals. In other words, Trump was effectively accusing the Singaporean company of acting as a front for the Chinese.
The bigger picture here is that Mr #Trump's policy of #AmericaFirst means the US is becoming more protectionist. Blocking a deal before it has even been agreed is pretty strident. A cynical interpretation of this decision is that the Trump administration is defending a struggling company already under siege for abusing its mobile patents to kill competition. The danger is that it dissuades foreign companies from investing in America.
Trump's protectionist stance has its dangers for US businesses