Celestica

(CLS) - Get Report

expanded its business relationship with

IBM

(IBM) - Get Report

Wednesday by acquiring Big Blue's properties in one of the largest divestments in the electronics manufacturing services industry.

IBM agreed to sell three circuit board assembly operations and assets in Rochester, Minn., and Vimercante and Santa Palomba, Italy, to the Toronto-based company.

The move adds $1.5 billion in revenues to Celestica's top line and makes IBM one of its largest customers, Celestica president and chief executive officer Eugene Politsuk said in an interview Wednesday.

"This is very complementary to what we've been doing," Politsuk said. "This continues our rapid growth of 60% a year."

Celestica's stock rose modestly to 47 3/8, up 9/16 , or 1%, after the announcement. IBM was up 2 3/16, or 2%, to 121 3/16. (Celestica ended flat at 46 13/16, while IBM finished up 7/8, or 1%, to 119 7/8.)

Celestica was spun off from IBM three years ago and has grown at a rapid clip by courting companies like

Hewlett-Packard

(HWP)

,

Cisco

(CSCO) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

. It continues to gain market share on the industry's No. 2 player,

SCI Systems

(SCI) - Get Report

, in a small field.

"Buying these properties bolts on about 30% top-line growth," said Stuart Bogard, analyst at

Robertson Stephens

, who rates the stock outperform and has done no underwriting for the company. "In this industry, the bigger, the better."

This deal continues a trend where computer manufacturers are increasingly spinning off and outsourcing their manufacturing and assembly operations to focus on their core businesses, according to Bogard. "The pace of deals like this has been accelerating," he said.

Details of the financing for the transaction, valued at around $500 million, were not immediately available. The company has about $350 million in cash and $130 million in debt securities it could use to pay for the facilities, according to Bogard.

"This gives Ceslestica a greater presence in Europe," said Bogard. "Also it should be accretive to earnings and should cause analysts to raise top-line estimates."

Bogart is looking for earnings of 67 cents for the fiscal year ended Dec. 31 and a bump of 38% to 90 cents for 2000.

Celestica's stock surged 350% in 1999 but has come under pressure in recent days as the broader market retreated and But he thinks the stock will continue its march to his target of $66 within a year.