Middlefield-based Zygo Corp. will pay a $5.4 million break-up fee to terminate a merger agreement with suitor Electro Scientific Industries Inc., after the value of the all-stock deal declined amid the weaker market.
Zygo will be required to pay another $1.2 million if its board approves another deal to sell its businesses in the next six months. Zygo makes optical components, inspection and measurement equipment and automation systems.
Portland, Ore.-based Electro, which makes test equipment for semiconductor makers, had agreed to buy Zygo in October in an all-stock deal worth about $173.6 million, or $10.30 per share, at the time.
But because Electro’s shares have since declined, the deal is now worth about $105.9 million, or $6.29 per share, based on Zygo’s 16.8 million outstanding shares as of Nov. 3.
At 11 a.m., Zygo shares traded at $4.68, down 37 cents, or 7.3 percent, while Electro shares were $6.58, down 13 cents, or 1.9 percent. (AP)
