Orbotech

Orbotech Ltd.

Type	Public (NASDAQ: ORBK)
Industry	Electronics
Founded	1981
Founder(s)	Dr. Shlomo Barak
Headquarters	Yavne, Israel
Key people	Yochai Richter, Chairman Raanan Cohen, CEO
Products	Automated optical inspection solutions
Revenue	US$ 529.36 million (2010)
Operating income	US$ 57.34 million (2010)
Net income	US$ 34.15 million (2010)
Employees	1,770
Divisions	Flat Panel Displays Printed Circuit Boards
Subsidiaries	Orbograph Ltd. Orbotech LT Solar, LLC Frontline PCB Solutions Ltd.
Website	www.orbotech.com

Orbotech Ltd. (NASDAQ: ORBK) is an international developer and producer of automated optical inspection (AOI) and related imaging and computer-aided manufacturing systems. The company's imaging tools are used in the manufacturing of printed circuit board, flat panel displays, and IC packaging, among other applications. These systems aid manufacturers by providing highly accurate, high-speed, and automated optical inspection, allowing faster production speeds with less waste and at lower cost. The company is headquartered in Yavne, Israel and operates in North America, Europe, Japan and Asia-Pacific.^[1]

Corporate history

Early years

Orbotech was founded in 1981 by a team of engineers at Electro-Optical Industry Ltd. (El-Op) led by Dr. Shlomo Barak, who was developing electro-optical systems for military use, but saw commercial use for them as well. The company they formed was called Optrotech and received financial backing from Uzia Galil of Elron Electronic Industries, a leading Israeli holding company. After 18 months of development, Optrotech was first to market with its first-generation Automated optical inspection product, although a number of other companies also had been working on their own automated inspection systems.^[2]

As the first to market, Optrotech was able to become the market leader in its field helping transform the printed circuit board industry, enabling companies to begin the first of a series of dramatic productivity improvements. The faster production times and greater volumes helped drive costs down, and the steadily dropping prices of printed circuit boards provided still further stimulation for the development of the global electronics and computer industries.^[2]

In 1983 a fellow Israeli company Orbot was founded by brothers Yochai and Kobi Richter^[3], Shimon Ullman and Zvi Lapidot; with the financail backing of Ormat Industries.^[4] Orbot successfully launched competing automated optical inspection solutions and by 1986 overtook Optrotech as the AOI market leader.

In 1984 Optrotech had an initial public offering on NASDAQ raising $10 million USD. The funds raised enabled Optrotech to develop the next generation of its automated optical inspection technology and launched an effort to diversify its market, beginning development of its first CAD/CAM system.^[5]

Merger of Optrotech and Orbot

In 1991 due to a slowdown in the global AOI market Optrotech and Orbot started discussing a merge of their complementary operations. In August 1992, Optrotech and Orbot reached a merger agreement, in which Optrotech absorbed Orbot, excluding its semiconductor subsidiary Orbot Instruments (which was later sold to Applied Materials). The resulting business was then renamed Orbotech and managed to capture 70 percent of the AOI market.^[6]

Growth by diversification and acquisitions

In 1995, Orbotech adapted its technology to provide automatic cheque reading capabilities for banks and other check processing customers, launching a new subsidiary Orbograph Ltd.^[7]

In 1996, Orbotech established a joint venture with Germany's Jenoptik AG, to develop a laser-based direct imaging system for the production of PCB prototypes. The partnership came under full ownership of Orbotech in 2000.^[8]

In 1997, Orbotech acquired the AOI business of Germany's W. Schuh GmbH, a company thtat specialized in the production of assembled printed circuit board inspection equipment.

In 1998, Orbotech boosted its presence in Japan by acquiring Toyo Ink Manufacturing's PCB sales and marketing operations, as well as Toyo's computer-aided manufacturing (CAM) product line, which was developed by its Israeli subsidiary EIT.^[9]

In 1998, Orbotech entered into an agreement with Valor Computerized Systems Ltd. (which is now part of Mentor Graphics), to form Frontline PCB Solutions, a joint venture that develops CAM software for PCB fabrication. Frontline PCB Solutions is owned equally by Orbotech and Mentor Graphics.^[10]

Entry into the flat panel displays market

During the 1990' Orbotech started developing a new automatic inception product line to support the new, fast growing, market of Liquid crystal display (LCD) flat panel displays. In 1999 Orbotect acquired Japan's KLA Acrotec from the KLA-Tencor Corporation, which enabled the company to develop a leading position in the LCD Inception market.^[11]

2000's

In 2001, Orbotech established its own venture capital arm , Orbotech Technology Ventures Ltd., in order to invest in technology start-ups.^[12]

In 2004, as part of the company’s strategy of diversifying into new growth areas for imaging technologies, Orbotech established a new subsidiary Orbotech Medical Solutions Ltd., to focus on the medical market. In 2005, Orbotech Medical acquired Imarad, a privately-held Israeli company that developed a technology to manufacture high performance, solid state cadmium zinc telluride gamma radiation detectors, for $7.0 million; and in 2007 Orbotech Medical acquired 3D Danish Diagnostic Development A/S, a privately-held Danish company engaged in the development, manufacture and sale of gamma cameras for use in nuclear cardiac imaging, for approximately $41.0 million.

In October 2010, Orbotech entered into an agreement with General Electric in which it sold Orbotech Medical Solutions to a subsidiary of GE, GE Medical Systems Israel Ltd. (formerly Elscint Ltd.).^[13]

In September 2011, Orbotech's subsidiary Orbograph diversifies into healthcare revenue cycle management through the acquisition of Correct Claims Now, a company that provides healthcare payments processing services.^[14]

See also

• Automated optical inspection
• Elron Electronic Industries
• Ormat Industries
• Silicon Wadi

External links

• Orbotech official website
• Orbograph official website
• Frontline PCB Solutions official website

References

1. ^ Orbotech Ltd. | Company profile from Hoover's
2. ^ ^{a b} "Gale Directory of Company Histories: Orbotech Ltd", The Gale Group, Inc, http://www.answers.com/topic/orbotech-ltd#ixzz1Yoh16Jd8 
3. ^ Richter family increases Orbotech stake Globes, 14 Sep 2009
4. ^ Ormat Technologies Inc (ORA) People | Reuters.com
5. ^ Israel's Financial Opportunities: profile of Orbotech Ltd, allBusiness
6. ^ OPTROTECH AGREES TO MERGE WITH ORBOT PR Newswire › August 17, 1992
7. ^ Orbograph Check Processing Solutions
8. ^ Orbotech Establishes Joint Venture To Develop Direct Imaging Technology Business Wire / April 30, 1996
9. ^ Orbotech Announces Signature of Agreement With Toyo Ink And EIT Business Wire › July 28, 1998
10. ^ Frontline PCB Solution - About Us
11. ^ Orbotech to Acquire KLA Acrotec Electronic News / Feb 15, 1999
12. ^ Israel Venture Capital Journal; Jun/July 2001 No. 1 Vol 3
13. ^ GE Healthcare to Acquire Orbotech Medical Solutions Business
14. ^ "Orbograph Diversifies into Healthcare Revenue Cycle Management Through Acquisition of Correct Claims Now Assets". PRNewswire. Sept. 27, 2011. http://www.prnewswire.com/news-releases/orbograph-diversifies-into-healthcare-revenue-cycle-management-through-acquisition-of-correct-claims-now-assets-130621913.html.