Wednesday, January 21, 2009

ESI Merger Stumbles

Portland, Oregon-based Electro Scientific Industries, a supplier of lasers for the microelectronics and semiconductor industry, said today that Zygo Corporation has notified the company that its board has withdrawn its recommendation in favor of a merger of the firms. ESI said it would acquire Zygo in a stock deal in August. The move by Zygo came shortly after ESI said that it saw lower than expected orders for its products in its third fiscal quarter, and that it would cut its revenue estimates to $26M for the quarter, down from an expected $30 to $40M in revenues. The firm blamed the global economic downturn, and specifically "extraordinary pressure" in its market due to falling consumer demand for electronics, weak memory prices, and the impact of the global credit crisis for the revised revenue outlook.