(By Balaseshan) Bel Fuse Inc. (NASDAQ: BELFB) (NASDAQ: BELFA), a producer of electronic products, said it has agreed to purchase the Transpower magnetics business of TE Connectivity for about $22.4 million in cash.
The acquisition is expected to be immediately accretive to Bel's earnings. The Transpower magnetics business had trailing twelve month revenue of about $75 million.
The purchase of the Transpower business includes the ICM (integrated connector modules) family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21, RJ.5, a line of modules for smart-grid applications and discrete magnetics.
Bel said the acquisition, which is the company's fourth in the past five months, advances the company's strategy to position it for long term growth and profitability. Bel will also receive a license to produce ICM products using TE's planar embedded magnetics technology.
"We believe the acquisition of the Transpower business solidifies our position as the world-wide leader for ICM's. The combination of the two businesses will create an exceptional portfolio of products and enhance Bel's leadership in the deployment of next generation ICM's," said Daniel Bernstein, Bel's President and CEO.
Bernstein said TE demonstrates the confidence that Bel will provide the same high level of service to customers that continue to purchase from both the companies. Bel will retain the Changping, China manufacturing facility and key North American associates who support the business unit.
Houlihan Lokey and Stephens Inc. acted as financial advisors to Bel in this transaction. The transaction is expected to be completed in the first quarter of 2013.
Bel designs, manufactures and markets an array of magnetics, modules, circuit protection devices and interconnect products. These products are designed to protect, regulate, connect, isolate or manage a variety of electronic circuits. Its products are primarily used in networking, telecommunications, computing, military, aerospace and transportation industries.
BELFB closed Wednesday's regular session up 4.31% at $15.24, while BELFA ended $14.23.