Newport Corp. (NEWP) to be Acquired by MKS Instruments for $23 Per Share

Shares of Newport Corp. (NEWP) were trading up +7.96 or +52.93 percent to $23.00 per share in Tuesday’s premarket after news broke early this morning that the company would be taken over by MKS Instruments (MKSI) for $23 per share in an all-cash deal. Newport Corp. stock closed at $15.04, up +0.03 or +0.20 percent in Monday’s regular trading session.

Founded in 1969 as the Newport Research Corporation, Irvine, California based Newport Corporation is a leading world supplier of advanced technology products for scientific research, health sciences, aerospace and defense, semiconductor, photovoltaic and microelectronics fields.
The company’s broad range of technologies produces lasers, sub micron positioning systems, optical components and subsystems, as well as precision automation solutions for its customer’s research, manufacturing and engineering applications. Newport’s leading brands include Oriel Instruments, Corion, New Focus, Richardson Grating and Spectra-Physics. The company services customers in over 70 countries with 11 manufacturing facilities in the United States, UK, China, Germany and France.

Andover, Massachusetts based MKS Instruments Inc. is a global provider of instruments, subsystems and solutions which measure critical parameters in the manufacturing process for the improvement of performance and productivity. The company’s main markets consist of semiconductor manufacturing and other thin film applications including solar cells, flat panel displays, light emitting diodes and data storage media. In addition, the company’s solutions are applied to medical equipment and pharmaceutical manufacturing, energy generation and environmental monitoring.

The deal announced early this morning will have MKS Instruments pay approximately $980 million or $23.00 per share in an all cash transaction. The amount represents a +53 percent premium to Newport stocks closing price on Monday.

Once combined, the two companies are expected to have about $1.4 billion in pro forma annual revenue based on the two companies’ 2015 results. The transaction is expected to be accretive to MKS Instruments’ non-GAAP earnings and free cash flow in the first twelve months following the close of the transaction.

The combined company is expected to realize annualized cost synergies of $35 million within 18 to 36 months and revenue synergies from the expansion of MKS’s addressable markets and the leverage of the company’s complementary sales channels. MKS Instruments plans to fund the transaction through a combination of available cash on hand and as much as $800 million in committed debt financing.

Robert Phillippy, President and Chief Executive Officer of Newport Corporation said in the press release that, “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. We look forward to working closely with the MKS Instruments team to ensure a smooth transition.”

The transaction has already been approved by the boards of both companies but is still subject to the customary approvals including regulatory approvals and the approval of Newport Corporation’s shareholders. The deal is expected to be completed by the second quarter of 2016.

Other News About NEWP

Newport Corporation Reports Fourth Quarter And Full Year 2015 Results

Company reported net income of $0.24 per diluted share in the fourth quarter and $0.78 for the full 2015 year.

(NEWP)

Investigation was announced just after news of the transaction.

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Published on Feb 23, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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