Smartflex Systems Inc., an electronic parts maker, said Wednesday it agreed to be bought for about $67.9 million in cash by closely held Saturn Electronics & Engineering Inc., which makes electronic systems for the automotive, defense and other industries.
Auburn Hills, Mich.-based Saturn, which sells electronic parts to the top U.S. auto makers, agreed to pay $10.50 for each of Smartflex's 6.4 million shares outstanding, more than double the stock's price the day before the deal was announced.
The Tustin company's stock surged 90%, or $4.53 a share, to $9.56, the fourth-biggest percentage gainer in U.S. markets. Nearly 2.3 million shares were traded, compared with average daily volume of 99,328 over the last three months.
The acquisition will allow Saturn to expand its product line, a company spokeswoman said.
"We have plans to diversify," spokeswoman Ela Wardowski said. "Smartflex is a very high-tech company, and the acquisition will allow us to expand our electronic platform business into the telecom and medical fields."
Wardowski said the company hadn't decided whether it would close Saturn factories or fire or transfer employees. A Smartflex spokesman, John Hohener, said he "guessed" Smartflex factories wouldn't be closed. Worldwide, Smartflex employs about 1,600 people.
Saturn earned about $200 million in 1998, Wardowski said. Saturn does not release revenue details, she said. Smartflex earned $1.5 million in 1998, compared with a loss of $4.1 million the previous year. Revenue fell 19% to $107 million in 1998 from $133.3 million in 1997.
Smartflex executives, who own about 5% of the shares outstanding, have agreed to sell their stock. Saturn expects to make the tender offer by Wednesday.