Credit: Image source: Getty Images.What happened
Shares of Electro Scientific Industries (NASDAQ: ESIO) rocketed higher on Tuesday after the company announced alongside its second-quarter results that it had agreed to be acquired. The stock was up about 88.8% at 12:20 p.m. EDT.
So what
Electro Scientific announced that it had signed a definitive agreement to be acquired by MKS Instruments (NASDAQ: MKSI) in an all-cash transaction valued at approximately $1 billion. MKS will pay $30 for each share of Electro Scientific.
Image source: Getty Images.
The combined company will have about $2.2 billion in pro-forma annual revenue, and MKS expects the transaction to be accretive to non- GAAP earnings and free cash flow within 12 months of closing. Annualized cost synergies of $15 million are expected within 18 to 36 months.
Electro Scientific also announced its second-quarter results. Revenue was $85.9 million, and non-GAAP earnings per share were $0.59, up 21% and 51.3%, respectively. Both numbers came in ahead of analyst expectations.
Now what
"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," said MKS CEO Gerald Colella.
The deal is expected to close in the first quarter of 2019, pending regulatory and shareholder approvals. Electro Scientific cancelled its previously scheduledearnings calldue to the transaction.
10 stocks we like better than MKS Instruments
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and MKS Instruments wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 6, 2018
Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
