(Adds details from statement, share movement)
March 19 (Reuters) - KLA-Tencor Corp said on Monday it would buy fellow semiconductor equipment maker Orbotech Ltd in $3.4 billion deal, giving it access to the fast-growing market for printed circuit boards and flat panel displays.
KLA-Tencor's offer price of $69.02 per share, comprising $38.86 in cash and 0.25 of its stock, represents a premium of about 15 percent to Orbotech's closing price of $59.90 on Friday.
Israel-based Orbotech's shares were up 11 percent at $67.00 in premarket trading, KLA was down nearly 1 percent at $119.50.
KLA-Tencor also announced a $2 billion share repurchase authorization, which it plans to complete within 12 to 18 months after the Orbotech deal closes.
The deal will diversify California-based KLA-Tencor's revenue base and add $2.5 billion of addressable opportunity in the market for printed circuit boards, flat panel displays, packaging and semiconductor manufacturing, the company said.
KLA-Tencor, which expects the deal to add immediately to its revenue growth model, non-GAAP earnings and free cash flow per share, intends to fund the cash portion of the deal with cash from the combined company's balance sheet.
J.P. Morgan was financial adviser to KLA-Tencor, while Wilson, Sonsini, Goodrich & Rosati was its U.S. legal counsel. Meitar, Liquornik, Geva, Lesham, Tal was its Israeli legal counsel. (Reporting by Sonam Rai in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)