Wedbush Reiterates Neutral on Veeco Instruments Following Announcement of Acquisition of Synos Technologies

In a report published Friday, Wedbush analyst Craig Irwin reiterated a Neutral rating and $35.00 price target on Veeco Instruments VECO. In the report, Wedbush noted, “VECO announced that it agreed to acquire flexible OLED equipment maker Synos Technology for $70m. An additional $115m earn-out will be paid if performance milestones are met. The deal is expected to close in 4Q13. We believe the acquisition helps VECO to tap into flexible OLED market with great growth potential, but has minimal impact on the company's near-term outlook. We maintain our NEUTRAL rating and $35 PT. VECO expected the acquisition to be dilutive in 2014 and accretive in 2015. VECO expected Synos shipment to be $80m in 2014 and $200m+ in 2015. Revenue recognition of 50% of 2014 shipment is expected to be deferred to 2015. Synos has been working with an industry leader, who we believe is Samsung, on the FAST-ALD systems since 2011. The company expected the product shipment to start in 4Q13/1Q14.” Veeco Instruments closed on Thursday at $35.00.