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Orbotech promotional image

KLA-Tencor Corporation and Orbotech on Monday announced they had entered into a definitive agreement pursuant to which KLA-Tencor will acquire Orbotech in a transaction that values Orbotech at an equity value of approximately $3.4 billion and an enterprise value of $3.2 billion.

Orbotech technology is used in the manufacturing of consumer and industrial products throughout the electronics and adjacent industries. The company is a provider of yield enhancement and production solutions for electronics reading, writing and connecting, used by manufacturers of printed circuit boards, flat panel displays, advanced packaging, micro-electro-mechanical systems and other electronic components. The company is headquartered in Yavne, Israel and operates in North America, Europe, Japan and Asia-Pacific.

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“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. “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.”

Levy added that “Orbotech will continue to operate under the Orbotech brand as a standalone business of KLA-Tencor based in Yavne, Israel.”

Orbotech was founded in 1981 by a team of engineers at Electro-Optical Industry led by Shlomo Barak, who was developing electro-optical systems for military use, but saw commercial use for them as well.

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