Penril Corp. of Rockville says it has agreed to buy General Electric Co.'s Power Line Carrier Division, based in Lynchburg, for $10 million.
The Power Line Carrier Division makes and markets systems that permit electric power lines to carry communications signals. The GE unit last year had sales of about $20 million and employs 300 workers at its Virginia plant.
If the purchase is completed as planned, it will be a major expansion, increasing Penril's sales and work force by almost 50 percent, said President Kenneth Miller.
Miller also said the company is continuing negotiations to acquire another electronics manufacturer with annual sales in the neighborhood of $10 million. Penril has offered to buy the business, located outside the Washington area, but the offer has not yet been accepted, he said. Miller said he expects to conclude negotiations in two to three weeks.
The transaction with GE is scheduled to be completed in October, after the two firms negotiate a definitive agreement and their boards of directors approve it.
Penril manufactures data communications equipment, test instruments, electric power transmission equipment and high-fidelity speakers for home and automobile stereo systems. The company had sales last year of $41 million and employs about 700 workers.
Miller said he plans to keep the current GE plant and work force intact. Penril now has facilities in Rockville, California, New York, Connecticut, Massachusetts and Switzerland.
Miller said Penril wanted to buy the GE division because it fits into its electronics and telecommunications business and the GE unit holds "a dominant position in its market."
Penril will pay cash, financing the purchase through a revolving credit arrangement with Riggs National Bank; Miller said Penril would pay one-half percentage point above Riggs' prime rate.