MKS Instruments (NASDAQ: MKSI; Andover, MA) will acquire photonics products maker Newport Corporation ((NASDAQ: NEWP; Irvine, CA) for $23 per share in an all-cash transaction valued at approximaely $980 million. The combined company should have approximately $1.4 billion in pro forma annual revenue, based on the two companies’ 2015 historical results. MKS Instruments provides instruments, subsystems, and process control solutions that for advanced manufacturing processes. Its primary markets are manufacturers of capital equipment for semiconductor devices and other thin film applications including flat panel displays, solar cells, light emitting diodes, and data storage media.
MKS Instruments intends to fund the transaction with a combination of available cash on hand and up to $800 million in committed debt financing. The combined company will maintain a very strong balance sheet, with combined pro forma net cash and investments on hand of approximately $425 million.The combined company expects to realize $35 million in annualized cost synergies within 18 to 36 months and anticipates revenue synergies from the expansion of addressable markets and leverage of complementary sales channels.
“The combination of MKS Instruments and Newport creates a premier supplier of critical components and subsystems for a diverse set of growing end markets, each with a common need for highly precise technology enabling solutions,” said Gerald Colella, MKS Instruments’ Chief Executive Officer and President. “Our shared customer requirements and complementary technologies together with our increased scale will enable us to lead in our served markets, deliver innovative and cost-effective solutions for our customers, and drive profitable growth.”
Robert Phillippy stated, “This combination represents a great outcome for all of Newport’s stakeholders. The complementary nature of the two companies’ technologies and customer base will create exciting opportunities for our employees, and enable the combined company to deliver innovative solutions to our customers.”
The transaction has been approved by MKS Instruments’ and Newport’s board of directors and is subject to customary approvals, including regulatory and approval by Newport’s shareholders, and is expected to close in the second quarter of 2016. Lazard acted as financial advisor to MKS Instruments. JP Morgan acted as financial advisor to Newport Corporation.
Source: Newport Corporation