Laird Plc, the biggest maker of electromagnetic shields for mobile phones, rose the most since July in London trading after announcing the acquisition of Cattron Group International Inc.
Laird climbed 9.1 percent. The London-based company will pay $90 million in cash for Cattron, according to a Regulatory News Service statement this morning. The deal will be “significantly earnings-enhancing” in 2011, the company said.
The acquisition of Cattron, a designer of wireless control and automation products, “will allow Laird to expand its wireless machine-to-machine offering,” the company said.
“The timing of the acquisition is a surprise, as we would have thought that the group would have waited until it had clearly demonstrated it was on a recovery path” analyst Steve Medlicott of Altium Securities said in an e-mailed note. “That said, a diversification is not necessarily a bad thing and the group has tended to buy well in the past.” He retained his “hold” recommendation on the stock.
Laird announced on July 29 it was “pursuing an exit” from its money-losing handset mechanisms product line, including mechanical parts such as sliders and camera shutters for mobile phones, to focus on more profitable areas.
“The market for wireless control and automation systems continues to grow; Cattron is well placed to participate in this growth, while its combination with our existing wireless systems business is expected to provide further opportunities,” Peter Hill, chief executive officer of Laird, said in the statement.
The shares rose 12.7 pence to 152 pence at the 4:30 p.m. close in London. The stock has risen 21 percent this year, giving the company a market value of 404.8 million pounds ($640.4 million).