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As Self-Imposed Acquisition Deadline Grows Near, Orbotech’s Stock Continues Downturn

Consumer electronics company Orbotech’s stock fell 9.12% since the beginning of the month, reaching $54.7 just over a week before its acquisition by KLA-Tencor was expected to be finalized

Lilach Baumer 16:5123.12.18

The stock of Nasdaq-listed Orbotech Ltd., a manufacturer of processing, inspection, and repair systems for electronic manufacturing, fell 9.12% since the beginning of December. The company reached $60.19 on December 3 following a two week upturn, but dropped to $54.7 by Friday market close.

 

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Nasdaq-listed semiconductor company KLA-Tencor Corporation announced plans to acquire Orbotech in March, agreeing to pay around $69 per share for the Israel-based company, according to a company valuation of $3.4 billion. In October, at KLA-Tencor’s last earnings call, its CEO Rick Wallace said the company expects the deal to close by the end of 2018.
Orbotech's Yavne plant.Photo: Tal Shahar Orbotech's Yavne plant.Photo: Tal Shahar

 

 

On December 4, KLA-Tencor published a presentation for its Nasdaq investor conference, discussing Orbotech’s pending acquisition and its place in KLA-Tencor’s growth strategy without giving a specific date. Orbotech’s stock started its current downturn the same day.

 

As both companies operate in a number of jurisdictions, the deal required regulatory approval in Korea, Israel, the U.S., Taiwan, Japan, and China—all of which have been received barring China.

 

The simmering tension between China and the U.S. has sunk or cooled several deals in recent months, the most prominent of them being chipmaker Qualcomm Inc.’s $44 billion acquisition of Dutch chipmaker NXP Semiconductors NV, which fell through in July after two years of planning due to Chinese bureaucratic red tape.

 

Orbotech declined to comment on the state of the acquisition.

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