Veeco Instruments Soars on $2.18B Merger with Axcelis Technologies
All-stock deal creates a combined semiconductor powerhouse with an enterprise value of $4.4 billion, targeting high-growth markets like AI and power devices.
Veeco Instruments (VECO) saw its shares climb over 7% after Axcelis Technologies (ACLS) announced it would acquire the company in a . The merger is set to create a formidable player in the semiconductor equipment sector, with a combined enterprise value of roughly $4.4 billion.
Under the terms of the agreement, which has been unanimously approved by both companies' boards, Veeco shareholders will receive 0.3575 shares of Axcelis for each Veeco share they hold. This exchange implies a value of $34.91 per share for Veeco, a significant 14.71% premium over its closing price before the announcement. Upon completion, Axcelis shareholders will own approximately 58% of the new entity, with Veeco shareholders holding the remaining 42%.
The strategic combination aims to leverage complementary technologies and create a more diversified product portfolio, expanding the company's reach into high-growth segments. In a joint statement, the companies highlighted their focus on markets such as , positioning the new entity for future growth. The merger is expected to generate significant financial benefits, with the companies anticipating within the first two years after closing.
Market reaction to the deal was mixed, reflecting the different positions of the two companies' investors. While Veeco's stock jumped 7.5% to $32.72 on the news, Axcelis shares experienced a 3.4% decline to $94.27. This divergence suggests that while Veeco investors welcomed the acquisition premium, Axcelis shareholders may have concerns about potential share dilution and the inherent risks of a large-scale integration.
Despite the dip in Axcelis's stock, some analysts have responded positively to the merger's long-term potential. Benchmark analyst Mark Miller upgraded Axcelis to a "Buy" rating, setting a price target of $105 and noting the deal's accretive nature and its potential to open up new end markets for the company. The combined company's pro-forma financials for fiscal year 2024 showed impressive strength, with revenues of $1.7 billion and adjusted EBITDA of $387 million.
The transaction is expected to close in the second half of 2026, pending customary regulatory and shareholder approvals. The new entity will be headquartered in Beverly, Massachusetts, and will be led by Axcelis's current President and CEO, Russell Low. The combined board will feature representation from both companies, with Thomas St. Dennis, who currently serves on both boards, set to become the Chairperson.