NEW YORK (AP) -- Israel's Orbotech Ltd., which makes testing equipment used to make printed circuit boards and flat-panel displays, said Thursday it will acquire San Jose, Calif.-based Photon Dynamics Inc. for $290 million.
Terms of the agreement call for Orbotech to acquire all issued and outstanding shares of Photon Dynamics, a maker of test equipment for LCD displays, at $15.60 per share.
Orbotech will finance the deal with a combination of its own money and external financing.
The $15.60 offer price represents a 35 percent premium over Photon Dynamics' closing price of $11.56 on Wednesday.
Orbotech said the acquisition is part of a strategy to expand its flat-panel display business.
The boards of both companies have approved the deal, though its still awaits approval from Photon Dynamics shareholders. The acquisition is expected to close in the second half of the year.
In premarket trading, Photon Dynamics shares rose $3.54, or more than 30 percent, to $15.05.