Flextronics to Merge With JIT Holdings

Updated from 10:32 a.m. EDT

In its second major aquisition in less than two weeks, Singapore-based Flextronics International (FLEX Quote) Thursday said it would buy electronic components maker JIT Holdings in an all-stock deal valued at $640 million.

Terms of the merger call for Flextronics to issue approximately 8.3 million shares of stock to be distributed to JIT shareholders, based on Flextronics' closing share price of 77 3/8 Wednesday. The two companies will combine in a so-called pooling of interests, which makes the deal essentially tax-free.

If Flextronics stock makes a significant move before the deal closes, the value of the deal is subject to a collar, and the transaction will not exceed 9.85 million Flextronics shares or go below 7.27 million shares.

Flextronics International finished down 3 1/8, or 4%, at 74 1/4.

Like Flextronics, JIT is based in Singapore and is a contract manufacturer of electronic components. Flextronics said the merger with JIT will help the company expand into new geographic locations such as Northern China and Malaysia, as well as build on its business in Singapore.

"JIT's strong management team and business philosophy complement our core business strategies and solves our capacity requirements in Asia," said Michael Marks, chairman and chief executive officer at Flextronics, in a statement.

The deal comes less than two weeks after Flextronics agreed to merge with Chicago-based Chatham Technologies, a maker of components and packaging systems for the telecommunications industry. That all-stock deal was also valued roughly at 8.3 million shares of Flextronics stock.