MKS Instruments To Buy Electro Scientific Industries In $1 Bln Deal

(RTTNews) - MKS Instruments Inc. (MKSI) said it agreed to acquire Electro Scientific Industries Inc. (ESIO) for $30.00 per share. The all-cash transaction is valued at about $1 billion.

The combined company is expected to have about $2.2 billion in pro forma annual revenue, based on the two companies' calendar 2017 historical results. The transaction is expected to be accretive to MKS' Non-GAAP net earnings and free cash flow during the first 12 months post-closing. The combined company expects to realize $15 million in annualized cost synergies within 18 to 36 months.

MKS said it intends to fund the transaction with a combination of available cash on hand and up to $650 million in committed term loan debt financing.

The transaction has been unanimously approved by the MKS and ESI boards of directors and is subject to customary closing conditions, including regulatory approvals and approval by ESI's shareholders, and is expected to close in the first quarter of 2019.

Separately, Electro Scientific Industries reported that its Second quarter GAAP net income was $16.8 million or $0.47 per diluted share, compared to net income of $4.3 million or $0.12 per share one year ago. On a non-GAAP basis net income was $21.1 million or $0.59 per share, compared to net income of $13.7 million or $0.39 per share in the prior fiscal year's second quarter. Total orders for the quarter were $66.9 million, compared to $128.9 million one year ago and $82.3 million in the prior quarter.

Electro Scientific Industries' quarterly revenue was $85.9 million, compared to $71.0 million in the second quarter of last fiscal year.