Tyco Electronics To Acquire ADC For $1.25 Billion

Tyco Electronics reported Tuesday that it plans to acquire network infrastructure connectivity provider ADC for $1.25 billion.

Tyco Electronics said it has entered into "a definitive agreement" to acquire the Eden Prairie, Minn., firm and that, after customary closing conditions, the deal is expected to close in the fourth quarter. Now based in Switzerland, Tyco Electronics spun off from Tyco International.

Tyco Electronics said the addition of ADC's broadband connectivity products will position Tyco Electronics Network Solutions as a leading international provider of connectivity products to carrier and enterprise networks.

"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, CEO of Tyco Electronics, in a statement. "Consumers and enterprises want access to high-speed video and data where ever they are, on whatever devices they are using -- from smartphones to [high definition] and 3-D televisions to computers with advanced video-conferencing capabilities."

The combined operations of the two companies will establish complete connectivity product portfolios in major geographic markets, the firms said. ADC's distributed antenna system products will expand Tyco Electronics' existing wireless portfolio, which addresses the growing mobility demands of carrier and enterprise customers. ADC's professional services organization in the United States will be added to Tyco's business.

Tyco's bid for ADC resulted in a 44% premium in ADC's Monday closing stock price. Tyco said the ADC acquisition is expected to be accretive to Tyco's earnings in the first year of the deal. The deal is being announced as a tender offer and it will be followed by a merger.