Credit: Shutterstock photoTyco Electronics ( TEL ) announced Tuesday its intention to purchase ADC Telecommunications ( ADCT ) for $1.25 billion, valuing the Eden Prairie, Minnesota-based network equipment supplier at 44 percent above its Monday closing price.
In the merger, the Switzerland-based electronics company will pay $12.75 per share of ADC in a pure cash deal.
Tyco cites the wireless networking technology developed and marketed by ADC as the one of the company's most attractive and significant aspects. CEO Tom Lynch said, "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. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using."
Tyco also reported preliminary third quarter results of $3.1 billion in sales and adjusted earnings per share of 70 cents. Tyco's stock gained 4.31 percent to trade at $26.38 on Tuesday afternoon, while ADC rose 41.53 percent, to $12.52 per share.
The tender and subsequent merger of the two technology firms is expected to be complete by the fourth quarter of 2010.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
