Circuit maker Littelfuse has entered into definitive agreements to acquire the product portfolio of transient voltage suppression diodes, switching thyristors and insulated gate bipolar transistors (IGBT) for automotive ignition applications from On Semiconductor Corporation for a combined purchase price of $104 million.
“The acquisition of this portfolio aligns with our strategy to expand in power semiconductor applications as well as increase our presence in the automotive electronics market,” said Ian Highley, senior vice president and general manager, semiconductor products and chief technology officer for Littelfuse. “These products have strong synergies with our existing circuit protection business, will strengthen our channel partnerships and customer engagement, and expand our power semiconductor portfolio.”

On Semiconductor's portfolio has annualised sales of approximately $55 million. The transactions are expected to close in late August 2016.

Littelfuse also plans to invest approximately $30 million in its semiconductor fabrication locations to enhance its production capabilities, add significant capacity to its China fabrication facility and transfer the production of the acquired portfolio. The transfers will occur over the next few years, as the company works with customers on their timing and requirements.

“Once we complete the transfer of these products, we expect this acquisition to have EBITDA margins of more than 30%,” added Meenal Sethna, executive vice president and chief financial officer. “Including amortisation, interest and integration expenses, we expect the earnings per diluted share impact of this acquisition to be neutral in 2016, and accretive in 2017 and beyond.”