Swiss electronics company TE Connectivity (TEL.N) said it would buy sensor maker Measurement Specialties Inc MEAS.O for about $1.7 billion, including debt, to grab a bigger slice of the high-growth global sensor market.
TE Connectivity – formerly Tyco Electronics, which split from Tyco International Ltd TYC.N in 2007 – said it expects the global sensor market to grow 8 percent to $116 billion by 2019.
Measurement Specialties makes sensors that measure temperature, pressure, acceleration, or humidity in vehicles, home appliances, and airplanes among others.
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 rose in after-hours trading to trade slightly higher than the offer price, while TE's shares were largely unchanged from their close of $61.94.
The deal is worth $1.37 billion, excluding debt, based on 15.9 million Measurement Specialties shares outstanding as of May 21.
TE got 41 percent of its 2013 revenue from its business that makes electronic parts as well as brake and speed sensors for the auto industry.
Measurement Specialities' 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 in the first year after the deal is completed.
It expects to fund the deal through cash and additional debt and expects it to close in calendar 2014.
TE's financial advisers were Citi and Centerview Partners LLC and legal counsel was Davis Polk & Wardwell LLP.
Barclays was the financial adviser for Hampton, Virginia-based Measurement Specialties, while DLA Piper was outside counsel.
(Reporting by Ankit Ajmera in Bangalore; Editing by Simon Jennings and Savio D'Souza)