Newport Corporation (Nasdaq: NEWP) announced the signing of a definitive agreement to merge with Kensington Laboratories Inc., a privately held manufacturer of high-precision robotic and motion control equipment for the semiconductor and fiber optic communication industries.
The all-stock transaction will be accounted as a pooling of interests and, accordingly, Newport will restate its historical financial information to include the results of Kensington for all prior periods. Kensington, which holds more than 20 patents covering advanced robotics and motion control technology, is expected to have revenues of approximately $38 million for the year 2000.
The transaction is expected to be immediately accretive to Newport's 2000 and 2001 results, adding an estimated $.10 per share to Newport's projected 2000 earnings and an estimated $.15 per share to 2001 earnings. The transaction is subject to regulatory approval and other customary closing conditions and is expected to be completed in the first quarter of 2001.
Kensington Laboratories, with headquarters in Richmond, Calif., develops and manufactures advanced high-throughput, sub-micron motion control and robotic systems which are used for optical fiber alignment and semiconductor wafer handling, particularly in the advancedI300 millimeter processing systems now being deployed. Kensington will be integrated with Newport's Industrial and Scientific Technologies Division (ISTD), which develops and manufactures a complementary portfolio of components and subsystems that utilize sub-micron motion control technology.
The number of shares to be issued to Kensington shareholders in this transaction will be based upon the average price of Newport's common stock for the 10-day period ending two days prior to the closing of the merger. The agreement also includes a collar that restricts the number of shares issued to no fewer than approximately 3.2 million and no greater than approximately 4.1 million. Should the price per share of Newport's common stock trade outside the boundaries established by the collar, neither Kensington nor Newport has the ability to terminate the transaction.
Newport will provide investors with updated guidance for future periods, including the impact of this merger, in conjunction with its release of fourth-quarter 2000 and full-year results on Jan. 24, 2001.