MKS Instruments To Acquire ESI For $1bn
MKS Instruments, a provider of process control solutions, is
set to acquire laser micro-machining firm Electro Scientific Industries (ESI)
for approximately $1 billion in cash in order to strengthen its expertise in
the photonics and optics markets. The transaction is expected to close in the
first quarter of 2019.
The combined annual revenue of the two companies is expected
be approximately $2.2 billion, with the two firms expected to save $15 million
in annual operating costs within 18 to 36 months of the completed acquisition.
MKS intends to fund the transaction with a combination of available cash on
hand and up to $650 million in committed term loan debt financing.
MKS anticipates that the acquisition will further advance
its ‘Surround the Workpiece' offerings by gaining access to ESI's systems
expertise and technical understanding in laser materials processing. In
particular, ESI's printed circuit board processing systems will provide MKS the
opportunity to accelerate the roadmaps and performance of its laser, motion,
and photonics portfolio. In addition, the acquisition of ESI will enable MKS to
leverage its expertise more broadly across a new platform of industrial
‘We believe the ESI acquisition will help us deliver on one
of our long-term strategic objectives, which is to broaden our base as a
technical solutions provider to additional customers and markets,' confirmed
MKS CEO Gerald Colella. ‘We anticipate that the addition of ESI will strengthen
our expertise in the photonics and optics markets, enabling us to develop
systems that provide rich and robust solutions to meet the challenges of
evolving technology needs.
‘We expect to further progress our philosophy of “Solve
Together. Succeed Together” by bringing the best technologies and high quality,
reliable solutions in partnership with our customers, as we have demonstrated
with the Newport acquisition.'
MKS acquired Newport, which itself owns Ophir Optronics and
Spectra Physics, amongst other firms, in 2016 for approximately $980 million.
‘We believe this combination will provide significant value
for ESI's customers, as well as create exciting opportunities for our
employees,' said Michael Burger, president and CEO of ESI. ‘Over the years,
MKS' solutions have helped us improve our offerings for the Printed Circuit
Board processing market. I anticipate that the continued close collaboration
and expertise of these two outstanding companies will create even better and
more valuable solutions for our customers.'