Orbotech Makes Exit Worth $3.4 billion

YERUSHALAYIM -

The Israeli technology firm Orbotech announced a deal Monday to be sold to the U.S.-based KLA-Tencor for $3.4 billion, in one of the biggest ever buyouts of an Israeli company.

Prime Minister Binyamin hailed the news and praised Orbotech’s decision to keep its headquarters and offices in Israel.

“I was happy to hear that the company, which employs 2,500 workers, will continue to operate from Yavneh,” he said in a statement. “More good news for Israel’s high-tech industry and economy!”

CEO Asher Levy pledged on Monday that “Orbotech will continue to operate under the Orbotech brand as a standalone business of KLA-Tencor based in Yavneh, Israel,” Levy added.

“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,” said Rick Wallace, president and CEO of KLA-Tencor, in a statement. He added that his company and Orbotech “fit together exceptionally well in terms of people, processes, and technology.”

It marks the latest billion-dollar-plus exit for an Israeli tech firm, following that of automobile sensor maker Mobileye to Intel for $15.3 billion last year and navigation app Waze to Google in 2015 for $1 billion.

The companies said that 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, according to Globes.

Orbotech specializes in technologies used in making advanced electronic products. Its equipment is used in three main industries: flat panel displays, printed circuit boards, and semiconductors. In a past interview with Globes, Levy said, “The chances that someone holds in their hand a smartphone or tablet that Orbotech did not have something to do with its production, design or inspection are pretty much zero.”