WALTHAM, Massachusetts ( TheStreet) -- Raytheon ( RTN) signed an agreement to buy Applied Signal Technology ( APSG) for $38 a share, or about $490 million.

Applied Signal shares closed Friday at $35.02, making the deal's price almost a 9% premium.

The acquisition is expected to close in the first quarter of 2011, and isn't expected to have a material effect on Raytheon's earnings, the company said in a press release Monday.

Applied Signal provides advanced intelligence, surveillance, and reconnaissance systems.

-- Written by Joseph Woelfel

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