Tyco Electronics to acquire ADC for $1.25 billion

Tyco Electronics (NYSE: TEL) needed to beef up its consumer and broadband network capabilities, so it's going to acquire ADC Telecommunications (Nasdaq: ADCT) for $1.25 billion.

To fund its purchase, Tyco Electronics will pay $12.75 cash per share for ADC, a 44 percent premium to ADC's closing price on Monday. By acquiring ADC Telecommunications, Tyco will be able to extend its presence as a component supplier to manufacturers of smart phones, 3D TVs and video conferencing devices.

Along with expanding its consumer electronics component holdings, Tyco Electronics will expand its wireless connectivity portfolio with ADC's Distributed Antenna System (DAS) products as well as ADC's professional services business.

"This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses," said Tom Lynch, Chief Executive Officer of Tyco Electronics, in a release. "Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using -- from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities."

From a financial perspective, Tyco Electronics said the ADC acquisition will drive earnings up by 14 cents per share in the first full year after it closes. In fiscal 2009, ADC reported net sales of $997 million.    

In related news, Tyco Electronics reported preliminary fiscal Q3 profit of 72 cents a share on sales of $3.1 billion, beating Wall Street analyst forecasts.

For more:
- see the release here
- Reuters has this article

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