Israeli electronic-parts manufacturer Orbotech is being scooped up by California’s KLA-Tencor for $3.4 billion, the company announced on Monday.It is the fifth-most lucrative “exit” ever for an Israeli hi-tech company. The deal offers a 15% premium on stock shares when compared with the company’s closing price last week.Based in the central city of Yavne, Orbotech specializes in developing and manufacturing electronics, including printed circuit boards, flat-panel displays and semiconductors. The company was established in 1981 and employs around 2,500 people.It is unclear how the acquisition will affect Orbotech’s Israel operations in the long-term, and whether certain divisions will eventually relocate abroad. CEO Asher Levy told The Jerusalem Post that Orbotech would remain a separate entity, with the potential to hire further employees in Israel.“There is a full commitment to the Israeli market,” Levy said. “All the employees will remain... Orbotech will continue to operate as a standalone business of KLA-Tencor in Yavne.”The NASDAQ-listed Israeli company is an example of a local start-up that didn’t make a quick, lucrative “exit” by being bought out, but rather sought to scale-up and become a major corporation in Israel.The deal looks like a significant boon when compared with Orbotech’s closing price on Friday of $59.90. KLA-Tencor is paying $69.02 per Orbotech share, of which $38.86 is in cash and the rest is a quarter-share of KLA-Tencor.“This acquisition is a true testament to Orbotech’s strong leadership and success,” Levy added in a statement. “I firmly believe that this deal benefits our employees and creates additional value for our shareholders. Together with KLA-Tencor, we will significantly increase growth potential, accelerate our product development road map, and enhance customer offerings.”According to the agreement, KLA-Tencor will buy back $2b. worth of shares within the next year to year-and-a-half from when the deal closes.The transaction should be completed by the end of 2018, pending review by regulators and shareholders.“Our companies fit together exceptionally well in terms of people, processes and technology,” KLA-Tencor CEO Rick Wallace said. “In addition, KLA-Tencor has had a strong presence in Israel over the years, and this combination further expands our operations in this important global technology region.”Founded in 1997, KLA-Tencor has a capitalization of almost $19b. The company offers services such as process control and yield management systems, specifically for the semiconductor and nanoelectronics industries, according to its website. The firm employs some 6,000 people.Orbotech, with some 50 offices worldwide, is valued by the markets as being worth around $3b. The company’s stock has nearly doubled in the past 12 months and is up almost 20% since the start of 2018.The company reported revenues for 2017 totaling $901m., seeing double-digit growth from the previous year. Gross profits totaled some $425.3m.In terms of the transaction, Barclays acted as exclusive financial adviser to Orbotech, and JP Morgan was the sole financial adviser of KLA-Tencor.