Electro Scientific Industries Inc. has agreed to acquire New Wave Research Inc. for $36 million net cash outlay. NWR, a developer and manufacturer of high-end laser-based systems and components, is one of the market leaders in sapphire wafer scribing and laser micromachining.
Nick Konidaris, President and CEO of ESI, commented: "ESI's acquisition of NWR accelerates our mutual growth strategies by leveraging our combined core competencies into adjacent markets. NWR will give us entry into the sapphire wafer scribing market through their Accuscribe systems, as well as LCD repair with their Quicklaze suite of products. Together our strong research and development talent pool will provide us with centers of excellence in Portland, Montana, and Silicon Valley to help accelerate the development of new tools for both companies. In addition to these technical and market synergies we are excited about the expanded earnings potential and increased shareholder value this transaction provides."
Founded in 1990, NWR is a privately held company with 150 employees worldwide. The company is an established global provider of laser-based applications with an extensive installed base and direct presence in the United States, Europe, and Asia. In the semiconductor market, NWR's products are used for sapphire wafer scribing, flat-panel display repair and semiconductor failure analysis, among other applications. NWR also produces laser ablation and other tools employed for various industrial and scientific applications. Finally, NWR produces highly accurate laser-micromachining tools used for drilling, etching, and scribing a wide variety of materials.
"ESI is a market-leading photonic solutions company with an impressive product line and a growing business," stated Pei Hsien Fang, CEO and co-founder of New Wave Research. "ESI will enhance our best-in-class products by providing advanced scientific, engineering, and system design capabilities. This alliance will also greatly benefit our customers by giving them access to a larger range of cutting-edge products in addition to an expanded support network. We are very excited by the incremental growth opportunities this merger provides."
The acquisition of NWR, which is subject to approval by its shareholders, is expected to close within 30 days. Pei Hsien Fang will join ESI as vice president reporting directly to Nick Konidaris in charge of the New Wave Research Division. Excluding expenses associated with the outcome of purchase-price allocation and incremental stock-compensation expenses, this acquisition is expected to be approximately breakeven for ESI in fiscal 2008. On a GAAP-basis the acquisition is expected to be accretive in fiscal 2009, which begins in April 2008. Further details will be provided during ESI's regular earnings call on July 12.
