Lam to buy KLA-Tencor for US$10.6 billion
Lam Research and KLA-Tencor have entered into an agreement for Lam to acquire all outstanding KLA-Tencor shares in a cash-and-stock transaction, according to the companies.
KLA-Tencor stockholders will be entitled to elect to receive for the shares of KLA-Tencor stock they hold the economic equivalent of US$32.00 in cash and 0.5 of a share of Lam Research common stock, in all-cash, all-stock, or mixed consideration, subject to proration as more fully described in the merger agreement. The transaction values KLA-Tencor at approximately US$67.02 per share, or US$10.6 billion in equity value based on the closing stock price of Lam on October 20, 2015.
The combined company will have approximately US$8.7 billion in pro forma annual revenues, the companies said. The transaction is expected to be accretive to Lam's non-GAAP earnings and free cash flow per share during the first 12 months post-closing. The combined company expects to realize US$250 million in annualized cost synergies within 18 to 24 months of closing and anticipates generating approximately US$600 million in incremental annual revenues by 2020 through improved differentiation of each company's products and creation of new capabilities.
"The pairing of Lam Research and KLA-Tencor brings industry leadership in process and process control together, accelerating our capability to address our customers' most difficult challenges as they scale to meet the market demands of lower power, higher performance, and smaller form factors," said Martin Anstice, Lam's president and CEO. "Lam Research and KLA-Tencor's shared commitment to collaboration and building strong customer trust, along with our respective track records of innovation, product leadership, and operational excellence, position us as a combined company to deliver the higher levels of technology differentiation and speed to solutions that are critical to our customers' long-term success."
"I strongly believe that this transaction represents a great outcome for all of KLA-Tencor's key stakeholders," said Rick Wallace, president and CEO of KLA-Tencor. "The combined company will be uniquely positioned to work collaboratively with our customers to help them meet the challenges of FinFET, multi-patterning and 3D NAND development. Given the complementary nature of the two companies' product offerings and technologies as well as the lack of product overlap, the combination will create an industry leader with greater opportunities for our respective employees for professional development and growth."
The transaction is expected to close in mid-calendar year 2016, pending the receipt of customary regulatory approvals. |
