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M/A-Com Technology to buy Mindspeed Technologies

LOWELL, Mass. (AP) -- M/A-Com Technology Solutions Holdings Inc. said Tuesday that it is buying semiconductor maker Mindspeed Technologies Inc. in a roughly $272 million deal that will position it as a leader in optical networking.

The Lowell, Mass., technology company said it will pay $5.05 per share for Mindspeed in a cash tender offer. It also will assume certain equity awards held by Mindspeed employees.

M/A-Com said the acquisition will add 15 to 20 cents per share to its 2014 adjusted earnings and 25 to 30 cents per share to its 2015 adjusted earnings.

The boards of both companies have approved the transaction and the deal is expected to close by the end of the year.

Mindspeed, based in Newport Beach, Calif., is also in talks to sell its wireless business, which it intends to complete prior to closing of the M/A-COM deal. If the wireless business is not sold, M/A-Com said it will be restructured and wound down.

The company also has a communications processor business, which M/A-Com says does not align with its long-term strategic focus. It said "additional options will be explored" for that business.

Mindspeed on Tuesday also reported that it narrowed its fourth-quarter loss to $51.8 million, or $1.26 per share, from $6.1 million, or 15 cents per share, last year. On an adjusted basis, it earned 2 cents per share versus a loss of 7 cents last year. Its revenue dipped slightly to $36 million from $36.3 million.

Analysts polled by FactSet were anticipating a loss of 2 cents per share on revenue of $36 million.

Shares of Mindspeed soared 68 percent in after-hours trading to hit $4.99 following the announcement. Its shares had fallen 7 cents to close regular trading Tuesday at $2.97.

M/A-Com shares were unchanged in after-hours trading. Its stock fell 69 cents to close regular trading at $16.73.