US Firm Buys Israeli Optics Unit for $650 Million

TTM Technologies, a US-based company, is acquiring Ophir Optics, a division specializing in infrared and laser optics, from MKS Instruments for approximately $650 million in cash. The acquired operations include manufacturing sites in Israel and Romania. The deal's valuation is based on projected EBITDA, with TTM anticipating around $63 million by 2027, reflecting a multiple of about 10.3. MKS, however, views the price as a multiple of over 18 on the projected 2026 EBITDA, suggesting TTM expects a significant jump in earnings next year.

Ophir Optics, founded in Jerusalem in 1976, has become a recognized name in advanced optics. The business being sold focuses on optical components for thermal cameras, night vision, and surveillance systems used in aircraft, drones, and ground vehicles. Notably, MKS will retain the Ophir Instruments laser measurement business and the Ophir brand itself. The transaction is expected to close in the second quarter of 2027, pending regulatory approvals.

The original Ophir company was established by three physicists at the Lev Institute in Jerusalem. Initially focused on optical coatings, it expanded into laser measurement devices and imaging system components. The company went public on the Tel Aviv Stock Exchange in 1991 and was later acquired by Newport Corporation in 2011 for about $230 million. MKS Instruments then acquired Newport in 2016, making Ophir part of a larger US technology group.

TTM Technologies, the buyer, manufactures advanced printed circuit boards, communication components, and electronic assemblies, with a significant portion of its business in the defense and aerospace sectors. This acquisition allows TTM to integrate optical capabilities into its existing systems, offering a more comprehensive solution to defense clients. TTM plans to finance the deal through cash, future cash flow, and its existing credit line, as part of a broader expansion strategy that includes a $400 million investment in manufacturing capacity in Asia.

For MKS, the sale generates substantial cash, aligning with its strategic focus on semiconductor manufacturing and advanced electronic packaging. The sale of Ophir Optics is seen as a move to streamline operations and concentrate on its core semiconductor-related businesses. The future success of the acquisition hinges on TTM's ability to realize the projected growth in EBITDA and translate it into improved net profit and cash flow.