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MTS Soars After $58.50-Share Acquisition by Amphenol

MTS shares jumped after the maker of test systems and industrial sensors agreed to be bought by Amphenol for $58.50 a share, or $1.13 billion.

Shares of MTS Systems  (MTSC) - Get MTS Systems Corporation Report jumped after the maker of test systems and industrial position sensors said it had definitively agreed to be bought by Amphenol  (APH) - Get Amphenol Corporation Class A Report.

Shares of MTS, Eden Prairie, Minn., at last check rose 52% to $58.54. Shares of Amphenol rose 1.5% to $135.29.

Amphenol, the Wallingford, Conn., producer of electrical equipment for the communications and aerospace industries, agreed to buy MTS for $58.50 a share cash. 

Based on 19.3 million MTS shares outstanding at July 30, the offer value is $1.13 billion.

The deal value is $1.7 billion, reflecting MTS's debt and net of MTS's cash.

"This acquisition is consistent with our strategy of continuing to expand our range of sensor and sensor-based products across a wide array of industries to further capitalize on the long-term growth potential of the electronics revolution," said Amphenol President and Chief Executive R. Adam Norwitt in a statement.

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The combined product portfolio "will enable us to offer even more innovative technologies to our customers around the world," Norwitt added.

The acquisition of MTS is expected to add to Amphenol’s earnings per share in the first year after closing, with about 10 cents and 6 cents a share attributable to MTS’s sensors and test-and-simulation segments respectively.

"MTS brings to Amphenol its high-quality technology solutions, a diversified customer base of blue-chip companies and a strong financial profile," said MTS Interim President and Chief Executive Randy J. Martinez. 

Amphenol will fund the deal with cash on hand and with borrowings under its current credit facilities.

The transaction has been approved by both companies' boards.

The companies hope to close the deal by mid-2021, subject to conditions including regulatory clearances and a vote of MTS holders.