(Adds details, shares)
June 9 (Reuters) - Chipmaker Analog Devices Inc said it would buy Hittite Microwave Corp in a deal valued at $2 billion to strengthen its radio frequency (RF) and signal conversion chip offerings.
Analog will pay $78 per share in cash, which represents a premium of 28.8 percent to Hittite's Friday close of $60.56 per share.
"Hittite's strength in RF, microwave, and millimeter wave technology complements (Analog's) RF and signal conversion expertise," Analog Chief Executive Vincent Roche said in a statement.
The company, which makes chips that help translate pressure, temperature and sound into digital signal, said it expected to fund the acquisition through cash on hand and short-term debt.
The deal is expected to close by the end of the third quarter.
Hittite had cash and short-term investments of $492.4 million and no debt as of March 31, according to Thomson Reuters data.
Analog also reaffirmed its revenue and adjusted profit forecast for the third quarter ending August.
The company forecast an adjusted profit of 60-64 cents per share. Analog said it expected revenue to rise by 1-5 percent from the second quarter, which translates into $701.4 million-$729.2 million.
Analysts on average were expecting revenue of $716.09 million on a profit of 63 cents per share, according to Thomson Reuters I/B/E/S.
Credit Suisse was Analog's financial adviser for the deal, while Deutsche Bank advised Hittite.
Hittite's shares rose about 29 percent to $78 in premarket trading on Monday. Analog's shares closed at $52.69 on the Nasdaq on Friday.
(Reporting by Lehar Maan in Bangalore; Editing by Kirti Pandey)