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Analog Devices Inc., which is a manufacturer of semiconductors used in smartphones, televisions and cars made an official statement today, saying that it agreed to acquire Hittite Microwave Corp. According to the companys statement, the purchase is estimated at 2 billion dollars its goal is to expand the portfolio with the products offered by Hittite.

Mr. Vincent Roche, who is the current Chief Executive Officer of Analog Devices Inc. said on a conference call on Monday, which was cited by Bloomberg: “Hittites product focus is highly complementary to our own. From a growth perspective, this transaction expands product offerings in our key end markets and allows us to address new opportunities.” As reported by the Wall Street Journal, Mr. Roche also added: “Hittites strength in RF, microwave, and millimeter wave technology complements ADIs RF and signal conversion expertise.”

Hittite Microwave Corp. will be acquired by Analog Devices at the price of 78 dollars per share in cash. The sale price is 29% higher than the closing price of Hittite on Friday – June 6th. As revealed in the Analogs statement, the deal got the approval of the boards of both companies. The transaction will be funded through cash on hand and short-term debt financing.

The deal, which is the third acquisition of an integrated circuits manufacturer in the U.S., is considered to be following the trend of consolidation in the business with chips. The acquisition is also believed to be beneficial for Analog Devices Inc., because it is expected to help it boost its adjusted earnings. The company did not disclose an exact date when the deal is to be closed, but the latter is expected to be finalized at the end of Hittites third financial quarter, which ends in about two months.

Analog Devices Inc. was 5.9% up to trade at 55.80 dollars per share in New York today, marking a one-year change of +20:75%. According to the information published on CNN Money, the 25 analysts offering 12-month price forecasts for Analog Devices Inc. have a median target of 55.00, with a high estimate of 65.00 and a low estimate of 48.00. The median estimate represents a +4.38% increase from the last price of 52.69.

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