Friday, January 23, 2009

Zygo board withdraws merger recommendation

By Mass High Tech staff

The board of directors at optical metrology systems supplier Zygo Corp. has withdrawn its recommendation of the previously announced merger with photonic and laser systems developer Electro Scientific Industries Inc.

The two companies announced in October the planned merger and the unanimous approval from both boards for the merger.

The board of Middlefield, Conn.-based Zygo (Nasdaq: ZIGO) said that its withdrawal of recommendation stemmed from “changes in conditions” since the agreement was signed in October.

The merger agreement will hold unless Portland, Ore.-based ESI (Nasdaq: ESIO) decides to end the planned merger.

The October announcement of the planned merger called for Zygo shareholders to gain 40 percent ownership in the combined company. Zygo shareholders would get 1.0233 shares of ESI stock for each share of Zygo stock, the two companies reported. If the merger goes  into effect, the plans also calls for three Zygo officials to join ESI’s 11-member board of directors. At the time, the deal only awaited stockholder approval.

Founded in 1970, Zygo supplies the semiconductor equipment industry with electro-optical design and manufacturing services, optical metrology instruments and precision optics.