ANN ARBOR, Mich. (AP) -- Kaydon Corp., which makes bearings and other industrial products, said Thursday that it reached a deal to sell itself to SKF Group for about $1.14 billion in cash.
The terms of the agreement call for SKF to pay $35.50 per share for the Ann Arbor, Mich.-based Kaydon. The price represents a 22 percent premium over Kaydon's Wednesday closing stock price of 29.10.
Its shares rose $6.43, or 22 percent, to $35.55 in premarket trading.
Sweden-based SKF makes and supplies ball and roller bearings, linear motion products, precision bearings, spindles and seals. It plans to fund the deal with existing cash and credit lines and expects the acquisition to boosts its profits within the first year.
The companies valued the deal at $1.25 billion, including about $95 million in debt.
SKF pointed to Kaydon's strong product portfolio, management and solid financial performance.
The deal, which has been approved by the boards of both companies, is expected to close in the fourth quarter, pending regulatory approvals. Kaydon stockholders also will receive their regular quarterly dividend of 20 cents that was declared in July 24.