Electro Scientific sold for $1 billion

MKS Instruments to acquire Electro Scientific for $30.00 per share

Electro Scientific sold for $1 billion, Stockwinners
Electro Scientific sold for $1 billion, Stockwinners

MKS Instruments (MKSI) and Electro Scientific (ESIO) announced that they have entered into an agreement for MKS to acquire ESI for $30.00 per share.

The all-cash transaction is valued at approximately $1B.

The combined company is expected to have approximately $2.2B 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 $15M in annualized cost synergies within 18 to 36 months.

MKS anticipates the acquisition will further advance the MKS strategy to enhance our Surround the WorkpieceSM offerings by adding systems expertise and deep technical understanding of laser materials processing interactions.

ESI’s knowledge in printed circuit board processing systems and other capabilities will provide MKS the opportunity to accelerate the roadmaps and performance of laser, motion and photonics portfolio.

In addition, ESI brings a new platform of industrial markets enabling MKS to leverage its expertise more broadly. MKS intends to fund the transaction with a combination of available cash on hand and up to $650M in committed term loan debt financing.

On a pro forma basis, as if the transaction closed on June 30, we expect the combined company to have a strong balance sheet with combined pro forma net cash and investments of approximately $400M and total term loan debt outstanding of $1B. This would result in pro forma trailing twelve month leverage, defined as debt to Adjusted EBITDA of 1.3 times and pro forma net leverage of 0.8 times.

Actual leverage ratios will depend upon a number of factors and shall be determined at the time of the closing. The company has also obtained a commitment to upsize its asset based revolving credit facility to $100M.

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 Q1 of 2019.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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