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Electronic equipment company Orbotech (ORBK 64.42, +4.52, +7.6%) trades to highs last seen in September 2000 after the company announced it was being acquired by semiconductor equipment firm KLA-Tencor (KLAC 116.75, -3.87, -3.2%) for $69.02 per share in cash and stock.

For those who may not be familiar, ORBK is a manufacturer of such electronic equipment products as printed circuit boards (PCBs), flat panel displays (FPDs), and semiconductor devices (SDs). KLAC is a manufacturer of semiconductor products and related nano-electronics. KLAC also provides light emitting diode (LED), power device, and compound semiconductor manufacturing products consisting of patterned wafer inspection, defect inspection, surface metrology, and data management products. As of the latest 10-K, KLAC’s largest customers were Samsung Electronics Co., Ltd. and Taiwan Semiconductor Manufacturing Company Limited.

Per the deal, the parties announced the entry into a definitive agreement pursuant to which KLAC will acquire ORBK for $38.86 in cash and 0.25 of a share of KLAC common stock in exchange for each ordinary share of ORBK, implying a total consideration of about $69.02 per share. The transaction has been approved by the Board of Directors of each company and is expected to close before the end of calendar year 2018.

Total cost synergies are expected to be about $50 million on an annualized basis within 12 to 24 months following the closing of the transaction, and the transaction is expected to be immediately accretive to KLAC’s revenue growth model, non-GAAP earnings and free cash flow per share.

The transaction values ORBK at an equity value of about $3.4 billion and an enterprise value of $3.2 billion. In addition, KLAC announced a $2 billion share repurchase authorization. The share repurchase program is targeted to be completed within 12 to 18 months following the close of this transaction.

In addition, KLAC intends to raise about $1 billion in new long-term debt financing to complete the share repurchase.

Including the $50 million in cost synergies, the combined company is expected to generate revenue growth on a pro forma basis of 7-9%, gross margins of better than 61%, and operating margins of 36% by 2020.

The deal is KLAC’s attempt to increase its exposure into the 5G, AR/VR, smart mobile, OLED, and automotive markets. The transaction will expand KLAC’s product addressable market from $6.0 billion to $8.5 billion by 2020, and supports KLAC’s long term revenue and earnings growth targets.

Today’s news comes following reports on March 8 that ORBK shareholders had been in talks to sell control of the company.