THE United States arm of Essex-based e2v technologies, the specialist developer and manufacturer of high technology components and sub-systems, has has conditionally agreed to buy QP Semiconductor, Inc for an initial cash sum of US$65million (about £36.

THE United States arm of Essex-based e2v technologies, the specialist developer and manufacturer of high technology components and sub-systems, has has conditionally agreed to buy QP Semiconductor, Inc for an initial cash sum of US$65million (about £36.5million).

An additional deferred consideration of up to US$15m may be payable by e2v Holdings Inc to QP shareholders, subject to future operating profit performance targets being achieved by QP.

Up to US$5m of the deferred consideration may be funded through the issue of new ordinary shares to the QP shareholders, with the remainder of the deferred sum also to be met in cash, with the entire cash consideration to be funded through the group's existing bank facilities.

QP is a well established US-based designer and supplier of specialty semiconductor components used in military and aerospace applications. Its extensive product range addresses a niche sector within this market, designed to deliver high performance in extreme conditions.

Chelmsford-based e2v said QP would strengthen the group's market position in high reliability specialist semiconductors and expand its business from this niche sector by around 40%.

The deal would also establish a US manufacturing base servicing the aerospace and defence sector and enable the group to benefit from the ability to better service complementary global markets.

QP achieved annual sales growth of 27% from 2005 to 2007, with 2007 operating margins of 35%, and e2v said the acquisition would be earnings enhancing during the current year and substantially from the year to March 2010.

Completion of the acquisition is conditional on the approval of e2v's shareholders, which will be sought at a general meeting to be held on September 18. Completion is also conditional on regulatory approvals and is expected to take place on September 30.

Keith Attwood, chief executive of e2v, said: “We are delighted to announce the proposed acquisition of QP, which represents a significant opportunity for the group and is an important step in establishing an operational footprint in the USA. It will increase our market share in the aerospace and defence sector and expand our relationship with contractors to the US Department of Defense.”