Orbotech Buying Calif. Firm

Israel-based Orbotech Ltd. will acquire Photon Dynamics of San Jose, a maker of test and repair systems for the liquid crystal (LCD) flat panel display industry, in a cash deal worth about $290 million.

Under terms of the agreement, Orbotech will pay $15.60 per share in cash for all issued and outstanding shares of Photon Dynamics' stock. The acquisition is Orbotech's largest and part of its strategy to grow and diversify its flat panel display (FPD) business, the company said. Orbotech makes testing equipment used in the making of printed circuit boards and FPDs.

"We see this new venture as a very exciting opportunity to provide FPD customers with a one-stop-shop that offers a complete line of yield management solutions. By teaming up with Orbotech, which is committed to investing in innovative technologies, we will be able to grow the combined business and improve its competitive positioning as we face a maturing industry," said Jeffrey A. Hawthorne, president and CEO of Photon Dynamics.

The boards of both companies have approved the deal, which is subject to customary closing conditions and stockholder and regulatory approvals. It is expected to close during the second half of 2008.

For more information, visit: www.orbotech.com or www.photondynamics.com