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Adaptec buys semiconductor firm

The company agrees to acquire Symbios, a Hyundai Electronics subsidiary, in deal worth $775 milllion.

Working to expand its customer base, Adaptec (ADPT) today agreed to acquire Hyundai Electronics America's semiconductor unit, Symbios, in a deal worth $775 million, including assumed liabilities.

Adaptec, a supplier of SCSI or "scuzzy" adapter cards, said it will complete the transaction by purchasing all of Symbios' outstanding stock for cash, using a portion of Adaptec's cash reserves and some borrowings. Adaptec said that it currently has over $700 million in cash on hand.

Share prices for Adaptec gained 15/16 in trading, to end at 25-5/8, up from yesterday's close of 24-11/16.

Fort Collins, Colorado-based Symbios, another components maker, had 1997 revenues of about $620 million, and employs about 2,500 people worldwide. Adaptec reported revenues of $933.9 million during the same period.

"These two companies have been focused on the goal of better information movement in computers, peripherals, and networks," Adaptec chairman Grant Saviers said. "We believe this combination will allow us to bring new customers and relationships into the fold."

Milpitas, California-based Adaptec said that, under the deal, it would buy all of the outstanding stock of Symbios for cash, using a portion of cash reserves and some borrowings. The maker of input/output components had said earlier in the day that it planned to make the "biggest announcement of its history."

"We are excited that a company of Adaptec's experience and market ability has embraced this excellent organization," C.S. Park, president of Hyundai Electronics America, said in a statement. The company is an American subsidiary of South Korea's Hyundai Electronics Industries.

Adaptec officials said it was too early to estimate any charges that may result from the acquisition.

The current management of Symbios is not likely to remain with the company, because it had been hoping to launch an initial public offering. Hyundai recently announced that it would sell Symbios, and its bankers contacted Adaptec two weeks ago.

"The Asian economic crisis certainly played a role in this," Adaptec's CEO Grant Saviers said during a conference call. "We concluded negotiations in that very brief time frame."

Saviers said that Adaptec had looked at purchasing the business once before, when it was owned by AT&T's (T) Microelectronics unit, before AT&T sold Symbios to Hyundai in 1995.

Adaptec expects the deal to close in about 90 days, pending U.S. regulatory approval.

Reuters contributed to this report.