* Deal worth $1.37 bln, excluding debt
* TE sees adj profit up 4 cents to 6 cents a share in first
year after deal
* Forecasts sensor business revenue to grow by $600 mln a
(Adds background on the sensor business, analyst's comment)
June 18 Swiss electronics company TE
Connectivity said it would buy U.S.-based sensor maker
Measurement Specialties Inc for about $1.7 billion,
including debt, to grab a bigger slice of the high-growth global
TE Connectivity was formerly known as Tyco Electronics,
which split from Tyco International Ltd in 2007. The
company said it expects the global sensor market will grow to
$116 billion by 2019 from $80 billion this year.
TE, which makes pressure and position sensors for the
automotive and aerospace industries, said the size of the global
market for its products is about $4 billion to $5 billion.
Measurement Specialties, based in Hampton, Virginia, makes
sensors that measure temperature, pressure, acceleration or
humidity for the industrial, medical and consumer appliance
TE said that buying Measurement Specialties would give the
combined company a shot at a worldwide sensor market worth about
"All of a sudden, (the deal) gives TE a significantly great
amount of breadth in the sensor family," said Amitabh Passi, a
San Francisco-based analyst at UBS Equities.
The deal would help its sensor business grow to $800 million
in revenue annually from $200 million now, according to TE. The
company reported revenue of $13.28 billion in fiscal 2013.
TE's acquisition of Measurement Specialties follows a deal
by Amphenol Corp, which makes fiber optic cables and
related devices, to buy General Electric's advanced
sensors business for about $318 million late last year.
TE's offer of $86 per share for each Measurement Specialties
share represents a premium of a little over 10 percent to the
stock's closing price on Wednesday.
Measurement Specialties' stock surged 10.34 percent in
after-hours trading to $86.07, while TE Connectivity's stock
dipped 0.2 percent to $61.81.
The deal is worth $1.37 billion, excluding debt, based on
Measurement Specialties' 15.9 million shares outstanding as of
Measurement Specialties' revenue increased 19 percent to
$412.7 million for the year ending March 31, 2014.
TE said it expects adjusted profit to rise in the mid-single
digits, or 4 cents to 6 cents per share, in the first year after
the deal is completed.
The Swiss company plans to fund the deal through cash and
additional debt. TE expects the deal to close in calendar 2014.
TE's financial advisers were Citi and Centerview Partners
LLC; legal counsel was Davis Polk & Wardwell LLP.
Barclays was the financial adviser for Measurement
Specialties, while DLA Piper was outside counsel.
(Reporting by Ankit Ajmera in Bangalore; Editing by Simon
Jennings, Savio D'Souza and Jan Paschal)