Orbotech completes acquisition of Photon Dynamics

04 October 2008

Israeli' electronics equipment supplier Orbotech Ltd. has closed its $290 million acquisition of Photon Dynamics Inc, provider of test and repair systems for the liquid crystal flat panel display (FPD) industry.

Orbotech is principally engaged in the design, development, manufacture, marketing and service of yield-enhancing and production solutions for specialised applications in the supply chain of the electronics industry. Orbotech's products include automated optical inspection and process control systems for bare and assembled PCBs, imaging solutions for PCB production and AOI, test and repair systems for flat panel displays. Through its subsidiary, Orbograph Ltd., Orbotech develops and markets automatic check reading solutions to banks and other financial institutions.

Under the terms of the agreement, Orbotech is paying $15.60 per share in cash for all of the issued and outstanding shares of Photon Dynamics' common stock, resulting in an aggregate purchase price of approximately $290 million. The acquisition was financed through a combination of internally-generated funds and external-source financing. In connection with the acquisition, Photon Dynamics, Inc. sold its wholly-owned subsidiary, Salvador Imaging, Inc., to a group of private investors.

This transaction will be immediately accretive to Orbotech on a cash basis, and the company expects, as a result of its completion, to record additional revenues of approximately $45 - 50 million during the remainder of 2008 from flat panel diplays.

However, particularly given the prevailing, considerable worldwide economic uncertainty and its potential effect on the electronics industry, the company is currently unable to estimate reliably revenues in subsequent quarters.

While the combined level of backlog in FPD systems for the company and photon dynamics, Inc. is at an all-time high and Orbotech believes that it remains firm,it also ssaid that it "recognises the potential for materially adverse trends in future orders, including deferrals".