Acer, the world's third largest PC vendor, has signed an agreement to buy handheld device maker E-Ten Information Systems of Taiwan.

The acquisition will put Acer in the position to market and further develop a range of handheld devices, including smartphones and GPS devices. E-Ten has developed and sold several smartphone models over the past several years, including its Windows Mobile 6.0-based Glofish smartphone with GPS (global positioning system), in addition to other handheld electronic devices such as GPS devices and pocket PCs.

The deal is an all-stock transaction valued at NT$9 billion (US$291.3 million). Acer is offering to exchange one share of its stock for every 1.07 shares of outstanding E-Ten stock to pay for the deal.

The boards of directors at both companies have already approved the deal, but they still face shareholder votes and approval by government regulators.

The companies expect the deal to close in the third quarter of this year.

Acer cited mobility products as the main reason for the purchase, especially smartphones.

"The acquisition of E-Ten will allow Acer to play a key role in the development of the dynamic, fast-evolving market of smart handheld devices as well as ultra mobile devices in the future and will help bring Acer’s cutting edge mobile solutions to an even wider audience," Acer said in a statement.

The E-Ten deal follows a string of acquisitions by Acer, including the purchase last year of PC maker Gateway and the recent deal to buy Packard Bell, the European electronics maker.