What: Shares of circuit board manufacturer Multi-Fineline Electronix (NASDAQ: MFLX) surged on Friday after the company announced that it was being acquired by Suzhou Dongshan Precision Manufacturing. At 12:40 p.m. ET Friday, the stock was up about 37%.

So what: Suzhou Dongshan Precision Manufacturing, a supplier of precision sheet metal components based on China, agreed to pay $23.95 per share for Multi-Fineline, a 40.8% premium over the stock's closing price on Feb. 3. The transaction has already been approved by the boards of both companies.

Multi-Fineline CEO Reza Meshgin pointed out the benefit of being acquired by a larger company. "We are pleased to have reached this agreement, which we believe realizes significant, immediate cash value for our stockholders, offers new opportunities for our employees and supports the future needs of our customers," Meshgin said. "Positioning MFLEX within a larger manufacturing conglomerate will also open new market opportunities for our flexible printed circuit and assembly solutions, further supporting the Company's long-term growth outlook. In turn, our Board has unanimously concluded that partnering with DSBJ is the best strategic path forward for MFLEX."

Now what: The news of the acquisition came on the same day as Multi-Fineline's fourth-quarter earnings report. The company reported $169 million of revenue, down 19.5% year over year and about $4 million short of the average analyst estimate. Non-GAAP EPS came in at $0.45, down from $0.66 during the prior-year period, but a penny higher than analysts were expecting. The company pointed to weakness in the tablet and smartphone segments as the drivers behind its lackluster results.

The acquisition values Multi-Fineline at about 12.7 times non-GAAP earnings, and with the company's revenue having slumped over the past few years, the transaction seems like a good deal for investors.