Benzinga | Jul 1, 2021 08:33AM EDT

MKS Instruments To Acquire Atotech In Cash And Stock Deal Valued At $5.1B

* MKS Instruments, Inc (NASDAQ:MKSI) inked an agreement to acquire process chemicals technology company Atotech Ltd (NYSE:ATC) for $16.20 in cash and 0.0552 of a share of MKS for each Atotech share.

* The equity value of the transaction is $5.1 billion, and the enterprise value of the transaction is $6.5 billion.

* The transaction will lead to a pro forma annual revenue of $3.8 billion. It is likely to be accretive to MKS' EPS within the first year and additive to MKS' free cash flow.

* MKS expects to realize $50 million in annualized cost synergies within 18 to 36 months.

* MKS plans to fund the cash portion of the transaction with a combination of available cash on hand and committed debt financing. MKS has also obtained a commitment to replace its current $100 million asset-based revolving credit facility with a $500 million revolving credit facility.

* The combined company will optimize the PCB Interconnect, a significant enabling point of next-generation advanced electronics representing the next frontier for miniaturization and complexity, MKS CEO John T.C. Lee said. The acquisition also provides MKS with a recurring revenue stream from a consumables portfolio for leading-edge devices.

* MKS held $910 million in cash and equivalents as of Mar. 31, 2021.

* Price action: ATC shares are down by 1.29% at $25.20 in the premarket session on the last check Thursday.