The $7 Billion Tech Acquisition You Haven't Heard Of | WAMU 88.5 - American University Radio

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The $7 Billion Tech Acquisition You Haven't Heard Of

While most of us were distracted waiting for a gold iPhone — gold! — the billionaire industrialist Koch brothers quietly made a deal to acquire an electronics company for $7.2 billion. The company they bought? Molex.

Molex makes component parts, which doesn't sound sexy. But it, like other component-part companies, is responsible for something critically important to our devices. Molex makes plugs and plug parts found in almost every computer. Its most well-known product is the Molex connector. It connects your computer power supply to drives and devices inside the computer, and is well known among techies.

To put the acquisition in perspective, Molex cost more than seven times the $1 billion Facebook paid for Instagram.

And not only is it a big purchase — Koch Industries is paying a 31 percent premium over last Friday's closing stock price for Molex — it's also a surprising one. The International Business Times reports:

"Analysts, who were quoted by Reuters, expressed surprise about the healthy valuation of the company and the buyer. 'The precise motivation of the acquisition is unclear to us at this juncture,' Amitabh Passi and James Hillier, analysts at UBS, were quoted as saying."

Incidentally, the news that captured our attention — Apple — and the news that didn't — Molex — are connected. Because Molex specializes in little-notice devices like connectors, antennas and switches, it's also a key Apple supplier. So if you have a smartphone, some Molex products are probably in your pocket.

Molex will keep its name; the deal is expected to close by the end of the year.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

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