ON Semiconductor today signed a definitive agreement to acquire Aptina Imaging, a provider of high-performance CMOS image sensors for automotive and industrial markets. Other markets addressed by Aptina’s products include cameras, mobile devices, and computing and gaming platforms.

Under the terms of the agreement, ON Semiconductor will pay approximately $400 million in cash to acquire Aptina Imaging. The acquisition will be funded by available cash on ON Semiconductor’s balance sheet and its existing revolver credit facility.

According to TSR, an independent market research firm, the worldwide demand for image sensors for automotive and industrial applications is expected to grow at annual compound rate of 16 percent between 2013 and 2016.

“The addition of Aptina vastly expands our scale and capabilities in image sensors and establishes us as a leader in image sensors for industrial and automotive related applications. I am excited about the possibilities that this transaction presents for both companies,” said Keith Jackson, president and CEO of ON Semiconductor.

Based on unaudited results, Aptina’s revenue for last twelve months ending on May 29, 2014, was approximately $532 million with gross and operating margins of approximately 29 percent and 3 percent, respectively. ON Semiconductor currently intends to report operational results for Aptina and other image and optical sensor businesses in a separate reporting segment as soon as practical after the close of Aptina acquisition. The transaction has been approved by ON Semiconductor’s and Aptina’s boards of directors and is expected to close during the third quarter of 2014, subject to required regulatory approvals and customary closing conditions.