Aliso Viejo-based Microsemi Corp. has agreed to sell its embedded security, RF, microwave and custom microelectronics businesses for $300 million to Mercury Systems Inc.
The divestiture sheds about 275 employees in Camarillo, San Jose, Phoenix and West Lafayette, Ind.
The business lines—which include solid state storage technology, security and mixed signal system-on-chip processing—accounted for about $100 million in revenue and adjusted profits of $28 million in the 12 months through September.
The business is not considered a core business line as Microsemi has recently moved into the budding Internet of Things and automotive markets, adding to its expertise in timing and synchronization, weapons and contraband screening systems, power supply, and Ethernet and broadband infrastructure.
The transaction, funded through a $265 million bank term loan and roughly $50 million cash, is expected to close in the next quarter.
Microsemi is Orange County’s largest locally-based chipmaker with annual sales of about $1.2 billion. It took the title from Broadcom Corp. last month after the Irvine-based chipmaker was sold for $37 billion to Avago Technologies Inc. in Singapore
The combined company, known as Broadcom Ltd., has its U.S. headquarters in San Jose.
Microsemi shares are up 3.3% in afternoon trading to a market value of $4.3 billion.
Mercury Systems shares are up 14.8% to a market cap of about $660 million.
