Analog Devices (ADI) agreed on Monday to buy Hittite Microwave (HITT) for around $2.45 billion in cash, as the chip maker looks to widen its footprint in radio-frequency technology.

Analog said it will pay $78 a share to acquire Hittite. The Norwood, Mass.-based company plans to fund the deal with cash on hand and short-term financing.

The deal, which has an enterprise value of $2 billion, is expected to close near the end of Analog’s third quarter. The price tag reflects a 29% premium over Hittite’s closing value on Friday.

Shares of Analog rallied 6% to $55.83 in recent trading. Hittite soared 28.6% to $77.88.

Analog develops signal-processing technology used in a wide range of electronic equipment. Its chips translate pressure, temperature and sound into digital signals.

“Our combined capabilities will enable us to bring more complete solutions to our customers and address more of the industrial, communications infrastructure, and automotive markets,” Analog Devices chief executive Vincent Roche said in a statement.

Credit Suisse acted as financial adviser to Analog Devices. Hittite was advised by Deutsche Bank.

Analog also affirmed its third-quarter guidance for adjusted earnings of 60 cents to 64 cents a share and revenue growth of 1% to 5%.

Follow Matthew Rocco on Twitter @MatthewRocco