Integrated Device Technology (IDT) is setting up its position in the optical interconnect business with the acquisition of IC vendor GigPeak for ₹1,699.87 crore ($250 million) in cash.

The deal is worth ₹209.42 ($3.08) for every share of GigPeak and values the company at a 22% premium over its Feb. 10 closing price, according to IDT.

IDT President and CEO Gregory Waters said the deal would give IDT products and technology that would complement the company's position in real-time interconnect products. GigPeak offers optical interface products for communications, cloud data centre and military as well as aviation markets.

"We gain an exceptional group of talented people and valuable intellectual property with the GigPeak team," Waters said in a statement.

The boards of directors of both GigPeak and IDT have unanimously approved the terms of the merger agreement and GigPeak's board is set to recommend the offer to stockholders, the companies said.