KLA-Tencor to buy photovoltaic solar inspection specialist

Already a leading supplier of inspection and metrology systems, the $465.8 million acquisition of Belgium-based ICOS Vision Systems signals an expansion for KLA-Tencor into the strong emerging markets of photovoltaic solar technologies and LED lighting products.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/21/2008

KLA-Tencor Corp has made a $465.8 million (316.9 million Euros) offer for ICOS Vision Systems Corp NV,  a Belgium-based maker of inspection equipment for semiconductor packaging and interconnect applications.

Already a leading supplier of inspection and metrology systems, the acquisition signals an expansion for KLA-Tencor beyond its fab operations business base. The San Jose-based company pointed to ICOS’ strength in the inspection of photovoltaic solar technologies and LED lighting products, two strong emerging markets.

“ICOS has exceptional synergy with KLA-Tencor in both markets and technologies, and would provide us with additional opportunities for both growth and diversification,” said Rick Wallace, CEO of KLA-Tencor, in a statement today. “Our two companies serve adjacent markets and offer complementary technologies, making this a good fit for both parties, and we believe that ICOS’s growth potential will be even greater as part of KLA-Tencor. This acquisition would give KLA-Tencor a significant presence in semiconductor packaging inspection, as well as in fast-growing markets like solar and LED lighting, setting the stage for ongoing growth outside KLA-Tencor’s primary market in semiconductor fab operations.”

The cash transaction is valued at $53.80 (36.50 Euros) per share, a 35% premium over the average closing price of ICOS’ shares in the last 90 days. KLA-Tencor said the deal is subject to least 85 percent of ICOS' outstanding shares being tendered, as well as the usual closing conditions.

ICOS’ board of directors has confirmed that it will issue a favorable opinion on the bid.

“I believe that combining the strengths of KLA-Tencor and ICOS would significantly increase our growth potential and provide remarkable resources for advanced technical development of our existing products and technologies. Both companies have highly complementary market positions, with no overlap in product lines,” Anton De Proft, ICOS’ president and CEO, said in the statement.

The transaction is expected to close in Q2 and be accretive to KLA-Tencor’s earnings per share in the first year.