Minnesota maker of chipmaking equipment is sold for $380M

CyberOptics Corp., the Golden Valley firm that is Minnesota's biggest player in the semiconductor equipment business, is being purchased by a larger firm for $380 million in cash.

In the deal announced Monday, Nordson Corp., based in suburban Cleveland, will add CyberOptics' equipment for inspecting chips and testing the alignment of silicon wafers to its larger portfolio of chipmaking tools.

CyberOptics just two weeks ago reported that its first-half sales were up 21% and it was on track for its first year of revenue exceeding $100 million. Its business will grow at a faster rate as part of a company with more customers, said Subodh Kulkarni, chief executive at CyberOptics.

"The challenge we as a small company have had is a lack of following through global channels and scale," Kulkarni said. "With the combination of Nordson's scale and our technology, we believe the growth will be significantly faster going forward."

Nordson, which has annual revenue of around $2.5 billion, said it would pay $54 a share for CyberOptics. That price represents a peak valuation for CyberOptics and 47% over the average of its daily stock price during the past month.

Shares in CyberOptics soared 29% on Monday to $53.03.

Sundaram Nagarajan, chief executive of Nordson, said that CyberOptics' 3D optical sensing technology and wireless measurement sensors will expand Nordson's reach in chipmaking equipment.

"We will invest in CyberOptics' greatest opportunities for profitable growth while also providing the advantages of our global business infrastructure," he said in a statement.

CyberOptics will remain in Golden Valley and its 200 employees will join Nordson, which makes valves, meters, nozzles and other products for chipmakers. It also makes sealants, coatings and other products used in the aerospace, defense, construction and automotive industries.

For many years, CyberOptics was the only Minnesota firm whose market value tracked with investor sentiment about the broader semiconductor industry. Its share value tripled in 2016, for instance, when CyberOptics rolled out new innovations and the chip cycle was on the upswing. It outperformed all other Minnesota-based stocks that year.

Under Kulkarni's leadership over the last eight years, CyberOptics' market value grew tenfold. Its sales in the last five years grew an average of 15%, including the effect of a decline in 2019. And its order backlog reached a record $55 million this summer.

"In the last two years, the growth rate has been really good. Part of that has been the pandemic and the semiconductor shortage," Kulkarni said. "That has continued, but at the same time we believe the lack of a global [distribution] channel was hurting our overall results."

Kulkarni said he expects Nordson will ramp up development and production at CyberOptics, which also has a plant in Singapore.

"I am pretty confident they will be able to grow faster than what we have," Kulkarni said. "I expect our Golden Valley facility and corresponding Singapore facility to continue to do well and continue to grow jobs."

The deal is expected to close by the end of the year. Kulkarni's role at the company after the sale is still to be determined, he said.