Despite the growing dominance of computers, Hewlett-Packard Co is still substantially more than just a computer company, and it gave a reminder of this yesterday when it announced that it had signed a definitive agreement to acquire Avantek Inc, the Santa Clara, California maker of microwave semiconductors, components and assemblies for $82.8m cash. Hewlett-Packard agreed to pay $4.60 a share for each of the 18m Avantek outstanding. It says the company expand and complement its own components business, which generated revenue of $302m in the 1990 fiscal year. The combination will create a broad-based and more competitive radio-frequency and microwave-frequency semiconductors and components business that has many synergies and few overlapping products, Hewlett-Packard said. Avantek employs 2,000 people and had sales of $155.5m in its 1990 fiscal year. The expanded organisation will pitch to the worldwide communications market for telecommunication and data communication products such as cellular radios, cordless telephones, high-speed fibre-optic systems and direct-broadcast satellite receivers. It will also serve the defence market with microwave components. To discourage anyone from muscling in on the menage a deux, Hewlett-Packard has also won an option from Avantek to buy up to 3.63m additional shares, 19.9% of the expanded equity, at the same $4.60 a share price. Avantek will also pay Hewlett $1.5m if the merger agreement is terminated because Avantek’s board recommends another offer – which will not be solicited. Avantek has plants in four California locations, Santa Clara, Newark, Milpitas and Folsom, and one in Frimley, Surrey. There is likely to be a cut in employment at Avantek to eliminate overlaps, but there’s no indication how many.
