Opal chairman Meny Erad: "This is a great day for Israeli high-tech." The Opal acquisition is dependent on a tender issued to the investing public.
Fortune 500 company Applied Materials, the world's largest supplier of wafer fabrication systems and services to the global semiconductor industry, announced today it will acquire two Israeli companies at an aggregate $285 million. Applied Materials will buy Opal and Orbot Instruments for $175 million and $110 million in cash, respectively.
In the first transaction, Applied Materials will purchase Orbot Instruments for approximately $110 million in cash. Orbot Instruments is a subsidiary of Orbot Systems which was not included in the 1992 Orbot Systems-Optrotech merger that created Orbotech. Applied Materials' acquisition of Orbot Instruments has been approved by the boards of directors of both companies. Orbot Instruments primary shareholders are Ormat, Bill Davidson and a group comprised of the company’s five founders.
Orbot produces systems for inspecting patterned silicon wafers for yield enhancement during the semiconductor manufacturing process, as well as systems for inspecting masks used during the patterning process. Orbot's 1996 revenues are projected at $43 million and 1995 revenues were $19 million. Orbot was founded in 1988 and has its headquarters in Yavne. Orbot employs approximately 200 people.
"By joining Applied Materials, we will be able to capitalize on our strengths in reticle
inspection, and add tremendous leverage to our emerging wafer inspection capability, to better serve our customers in these rapidly growing markets," said Zvi Lapidot, chairman of Orbot.
In the second transaction, Applied Materials will acquire any and all Opal outstanding shares at $18.50 per share and intends to acquire any Opal shares not purchased in this week’s tender offer in a second-step merger.
Proceeds to Opal shareholders will be about $175 million, while the net cash cost of the transaction to Applied Materials is expected to be approximately $145 million. The Opal acquisition has been approved by the boards of directors of both companies. Applied Materials has also entered into agreements with certain shareholders of Opal, Clal Electronics Industries. and Orbotech, and two Opal executive officers, representing in total 49% of Opal's shares.
Opal develops, manufactures, sells and services high-speed metrology systems used by semiconductors to verify critical dimensions during the production of integrated circuits. Orbot is a supplier of wafer inspection systems with leading-edge technologies.
Opal's 1996 revenues are projected at $62 million and 1995 revenues were $45 million. Opal conducts its principal sales and marketing activities at its facility in Santa Clara and its research, development and manufacturing activities in Ness Ziona, Israel. Additionally, Opal recently acquired ICT of Heimstetten, Germany, which manufactures scanning electron microscope columns. Opal was incorporated in Delaware in 1986 and employs approximately 325 people.
"This is great day for Israel’s high-tech," said Opal chairman Meny Erad. "Levering Israel’s strong technology talent, our world-class technology together with Applied Materials’ global infrastructure will allow us to provide advanced systems and service to meet our customers requirements."
"As independent companies, Opal and Orbot Instruments each have been gaining rapid customer acceptance," stated James C. Morgan, chairman and chief executive officer of Applied Materials. "Together with Applied Materials, we expect to leverage their technology across a significantly larger customer base." According to industry research, the market served by Opal and Orbot Instruments products has an expected compound annual growth rate of more than 22%, from $1.25 billion in 1996 to $3.43 billion in 2001.
Applied Materials began operating in Israel in 1990 with the opening of Applied Materials Israel (AMIL). AMIL develops and manufactures control systems for a number of Applied Materials' products distributed worldwide. Applied Materials opened a second subsidiary to provide after-sales support services for the local customer base.
Both transactions are expected to be completed during Q1 1997.
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