Shipley-based electronics company Filtronic is looking to double its business in the market that provides signals for the mobile phone sector by buying back a company it once owned

The firm has agreed to pay £10.7 million in cash and shares for Isotek Holdings, which develops leading edge telecommunications products.

If approved by Filtronic shareholders, the deal should be completed by November.

Filtronic chairman Howard Ford said “This is a transformational deal for both companies which will be attractive to all stakeholders.”

Filtronic, which designs and makes microwave electronics products for the wireless telecoms infrastructure market, said the proposed purchase was part of its strategy of creating a high growth wireless business through growth and selective acquisition It expects the deal to be contributing to improved earnings in the year to May, 2012, with additional revenues of £15m. The acquisition should help turn round the business, which was today expected to announce a small operating loss for the year to May.

Isotek, which employs 18 staff in Leeds, was part of the Filtronic group until it demerged in 1998. A Filtronic spokesman said it was then a different business focusing on the oil and gas sector.

Buying back Isotek will see Filtronic re-enter the base stations market, an area its originally exited in 2006 when trading conditions declined.

The spokesman said strong growth in 3G and 4G technology, enabling a wide range of data on mobile phones, was one of the spurs for the deal Isotek will continue to be run by former senior Filtronic managers, including Alan Needle and Christopher Mobbs. The Isotek business being bought by Filtronic produces special filters for mobile phone base stations.

It was formed in 2006 after the departure of the firm’s wireless infrastructure research and development team, who left when Filtronic sold its wireless infrastrucure business to Powerwave for $298m.

Filtronic said it had decided to buy Isotek after looking at the opportunities offered by re-entering the base station market. In a statement, Filtronic said the purchase would create a company ‘of attractive scale to key customers’.