Novellus Systems Shares Surged: What You Need to Know (NVLS)

Novellus Systems Shares Surged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Novellus Systems (Nasdaq: NVLS ) are surging today, up by as much as 22%, after it announced it is being acquired by Lam Research (Nasdaq: LRCX ) .

So what: Lam is acquiring Novellus in an all-stock deal valued near $3.3 billion where Novellus shareholders will receive 1.125 shares of Lam for each Novellus share held. The deal represents a 28% premium over yesterday's close for Novellus.

Now what: The combined company expects to realize roughly $100 million in cost synergies on an annualized basis by the fourth quarter of 2013, and Lam also announced a $1.6 billion stock repurchase program. Lam expects the deal to be accretive to non-GAAP earnings within a year of closing. Lam's leadership in etch and single-wafer cleaning equipment will combine well with Novellus' thin-film deposition and surface preparation technologies, and the combined company hopes to lead the industry's critical technology transitions.

Interested in more info on Novellus Systems? Add it to your watchlist by clicking here.

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Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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