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Onto Innovation (ONTO) Buys Inspectrology, Sees Revenue Synergies

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Onto Innovation Inc. (ONTO - Free Report) has acquired Inspectrology, LLC, a leading supplier of overlay metrology for controlling lithography and etch processes in the compound semiconductor market. The purchase price represents 1.4 times Inspectrology’s revenues in 2020 of about $20 million. Other terms of the transaction were not disclosed.

Headquartered in Wilmington, MA, Onto Innovation is a leader in process control, combining global scale with an expanded portfolio of cutting-edge technologies. The acquisition of Sudbury, MA-based Inspectrology is a strategic fit for the company’s portfolio of solutions for the high growth specialty and advanced packaging segment.

The buyout expands Onto Innovation’s position in the compound semiconductor market driven by higher content in 5G radio frequency and electric vehicles. The company’s Advanced Process Control software and Dragonfly System, when combined with Inspectrology’s products, are expected to provide revenue synergies.

As a leading player in the semiconductor equipment industry, Onto Innovation is well positioned to benefit from cost-effective solutions. The company continues to invest in research and development to provide differentiated products and services, which adds value to its manufacturing processes.

The rapid development of new products and enhancements to existing products enable the company to quickly respond to dynamic industry trends. It caters to various markets such as Bare Wafer, Image Sensors, Flat Panel Display, Probe Test and radio frequency/micro-electromechanical system. It is focused on capitalizing on almost every aspect of the semiconductor industry, including 5G, 3D NAND and advanced packaging.

Shares of Onto Innovation have gained 44.6% in the past year compared with 45.7% growth of the industry. The company delivered a trailing four-quarter positive earnings surprise of 17.1%, on average.



The stock currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Ubiquiti (UI - Free Report) , Aviat Networks (AVNW - Free Report) and Comtech Telecommunications (CMTL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ubiquiti delivered a trailing four-quarter positive earnings surprise of 27.9%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Aviat delivered a trailing four-quarter positive earnings surprise of 11.8%, on average. The company’s earnings beat the consensus estimate in three of the last four quarters.

Comtech delivered a trailing four-quarter positive earnings surprise of 2%, on average. The company’s earnings beat the consensus estimate in two of the last four quarters.

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