Orbotech Ltd. (Nasdaq: ORBK) has signed a definitive share purchase agreement to acquire the UK's SPTS Technologies Group Ltd. from European private equity firm Bridgepoint and others for $370 million. SPTS manufactures etch, deposition and thermal processing equipment for the microelectronics industry.
SPTS offers an extensive range of manufacturing solutions in the high growth Advanced Packaging and MEMS (micro-electro-mechanical systems) markets. Through this acquisition, the Yavne-based Automated Optical Inspection equipment provider expects to accelerate its growth and diversification strategy, and move up the electronics value chain. By building on SPTS’ technological and commercial leadership position, Orbotech will be able to offer solutions for a broad range of micro manufacturing applications. The acquisition will also expand Orbotech’s presence in Europe and North America.
Orbotech CEO Asher Levy said, “Orbotech identified Advanced Packaging as a strategic and natural extension of its business into an adjacent high growth market, where SPTS is a recognized technology leader. SPTS benefits from established, long-standing partnerships with major industry players. It is a well-known and highly respected brand with deep domain expertise in those segments in which it operates. Acquiring SPTS allows us to accelerate the expansion into Advanced Packaging, with multiple manufacturing solutions ideally suited for this growing segment."
The acquisition and related costs will be financed through a combination of cash and $300 million in debt financing under a new term loan facility. The acquisition and financing are expected to close during of the third quarter of 2014.
In 2014, under UK GAAP and on a standalone basis for the full year, SPTS is expected to generate revenue of $180 million, gross margin of 48% of revenue, and EBITDA margin of 25% of revenue. The acquisition of SPTS is expected to be accretive to Orbotech’s non-GAAP earnings immediately after closing. After closing, SPTS’ financial statements will be converted to US GAAP to be consistent with Orbotech’s financial statements.
Based on Orbotech’s and SPTS’s financial condition as of March 31, 2014, Orbotech estimates that post closing, it will have approximately $100 million of cash and cash equivalents on an adjusted basis.
J.P. Morgan is serving as exclusive financial advisor to Orbotech and Jefferies and Ernst & Young are serving as financial advisors to SPTS.
Published by Globes [online], Israel business news - www.globes-online.com - on July 7, 2014
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