MKS Instruments Acquires Electro Scientific Industries for $1 Billion

MKS Instruments has completed its previously announced acquisition of all of the issued and outstanding common shares of Electro Scientific Industries Inc (ESI), an innovator in laser-based manufacturing solutions for the micro-machining industry, for $30.00 per share, or approximately $1 billion.

MKS funded the transaction with a combination of available cash on hand and proceeds from a seven-year $650 million secured term loan, which was priced at 99% of par. The interest rate on the term loan is a floating rate based upon LIBOR plus 2.25%. The term loan was rated BB+ by S&P and Ba1 by Moody's. MKS anticipates achieving an estimated $15 million in annualized cost synergies within 18 to 36 months following the closing of the acquisition.

According to Gerald Colella, MKS’ Chief Executive Officer, the combination of MKS and ESI, will broaden their position in key industrial end markets with complementary solutions while expanding the total addressable market by $2.2 billion. The combination is expected to enhance MKS’ Surround the WorkpieceSM offerings, expand solutions for Advanced Markets and accelerate innovation. MKS plans to leverage component and systems expertise to provide rich and robust solutions to meet the challenges of customers’ evolving technology needs.

Lazard acted as financial advisor and Barclays acted as financial advisor and lead arranger and HSBC acted as arranger for the term loan financing.

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