PORTLAND, Ore. & MIDDLEFIELD, Conn., Oct. 16, 2008 -- Photonics-based technology company Electro Scientific Industries Inc. (ESI) announced today it will acquire Zygo Corp. in a stock-swap merger valued at about $173 million.
Portland-based ESI is a provider of photonic and laser systems to the microelectronics industry. Zygo, located in Middlefield, develops high-precision metrology solutions and optical systems for the semiconductor capital equipment and industrial markets.
Under the terms of the agreement, Zygo shareholders will receive 1.0233 shares of ESI stock for each share of Zygo stock in a tax-free transaction. Based on yesterday’s closing price of ESI stock, this represents a value of $10.30 per share of Zygo stock. Upon closing, ESI will issue approximately 18.1 million shares, resulting in 40 percent Zygo shareholder ownership of the combined company. Zygo will designate three members of the 11-member ESI board of directors.
"Zygo's precision metrology systems greatly enhance ESI's portfolio of differentiated laser microengineering technologies. ESI possesses substantial strengths in the area of systems design and high volume production support that will strengthen the partnership and better address the needs of our global customers. The combination of the two companies will create a premier photonic microengineering and metrology systems company," said Nick Konidaris, president and CEO of ESI, in a statement.
"Given our complementary nature, similar culture, and the ability of each company to help the other achieve its strategic goals, we have decided now is the right time for us to come together. In our view, this is a compelling transaction for Zygo's shareholders, and it should provide us with the resources we need to realize the full market potential of our technologies,” said Bruce Robinson, chairman and CEO of Zygo, in the same statement.
“As a result of the complementary nature of the technologies, there is little product or technical overlap, reducing risks typically associated with integration. In addition, this merger accelerates our existing growth strategy by extending our presence into adjacent markets in the microelectronics, medical, industrial, security and defense sectors. Finally, combining the resources of these two industry-leading companies will provide the size and scale to make strategic investments and to better compete in today’s challenging international markets,” Konidaris said.
Contingent upon the close of the merger, ESI's board has approved an increase to the existing share repurchase program to $100 million of outstanding ESI stock. To date, the company has repurchased about $4.7 million worth of its shares.
For more information, visit: www.zygo.com or www.esi.com
- The science of measurement, particularly of lengths and angles.
- Pertaining to optics and the phenomena of light.
- The technology of generating and harnessing light and other forms of radiant energy whose quantum unit is the photon. The science includes light emission, transmission, deflection, amplification and detection by optical components and instruments, lasers and other light sources, fiber optics, electro-optical instrumentation, related hardware and electronics, and sophisticated systems. The range of applications of photonics extends from energy generation to detection to communications and...
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