What happened

Shares of MTS Systems (NASDAQ:MTSC), a supplier of test systems, motion simulators, and sensors, skyrocketed on Wednesday. The stock had jumped more than 50% as of 10:50 a.m. EST.

The stock's gain follows news that Amphenol (NYSE:APH), a provider of high-technology interconnect, antenna, and sensor solutions, agreed to acquire MTS Systems.

A chart showing a stock price soaring

Image source: Getty Images.

So what

The definitive agreement for Amphenol to acquire MTS Systems represents a $1.7 billion deal when including the assumption of MTS' debt, liabilities, and cash. Explaining the stock's move higher on Wednesday, Amphenol agreed to pay $58.50 in cash per share for MTS. After the gain today, shares are trading for just under $58.

"We have long admired MTS' technology and position across a variety of attractive end markets," said Amphenol CEO Adam Norwitt in a press release about the deal. "This acquisition is consistent with our strategy of continuing to expand our range of sensor and sensor-based products across a wide array of industries to further capitalize on the long-term growth potential of the electronics revolution."

Now what

Though the deal has been unanimously approved by the board of directors of both companies, it is still subject to regulatory approval, a vote by MTS shareholders, and other closing conditions. The acquisition is expected to close by the middle of next year.

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