Richardson Electronics (NASDAQ: RELL) announced today that it has agreed to sell its RF Wireless and Power Division (RFPD) to Arrow Electronics (NYSE: ARW), a provider of electric components, for $210 million in cash.
Since the announcement, Richardson Electronic’s share price has rallied almost 5% to trade at $10.99 as of 12:02 pm ET.
RFPD designs and distributes electronic components used in digital broadcasting, defense applications and wireless communications.
The division is Richardson Electronic’s largest in terms of revenue, accounting for roughly 72% of the company’s total sales. For fiscal 2010, the division generated $356 million in revenue and $76.7 million in gross profits.
Post-acquisition, Arrow intends to rename RFPD as "Richardson RFPD," and will operate it as a separate business unit of Arrow Electronics. Richardson RFPD headquarters will remain in LaFox, Illinois.
The transaction is subject to the approval of shareholders as well as other customary closing conditions. The companies expect the deal to close in early 2011.
Richardson Electronics is a provider of engineering services and a distributor of electronic components to the radio frequency wireless and power conversion, electron device, and display systems markets. Services provided by the company include design-in support, systems integration, prototype design and manufacturing, testing, and logistics.