Buckland Group, which makes connectors for the consumer electronics industry, is buying Kigass Electronics for just over £1 million.
Kigass, based in Redditch, designs and manufactures spark ignition electrodes and spark generators for domestic gas cookers and boilers.
In the year ended June 30 Kigass reported a pre-tax loss of £9,429, after administrative expenses of £758,292, on sales of £2,755,000.
The assets being acquired under the deal are plant and equipment valued at £245,000, stocks of £445,000, and goodwill of £700,000. After taking into account certain trade creditor balances, the net consideration payable amounts to £1,070,000.
Buckland is an industrial group with well-established, low cost production facilities in Bangkok.
Buckland said the Kigass product range and customer base was highly complementary with Derlite's. While 95 per cent of Kigass' sales are in the UK, over 95 per cent of Derlite's sales are in the rest of the EU and in US/Mexico.
It said in a statement: "The combination of Derlite and Kigass gives the group a significant presence as a supplier of ignition components to the domestic gas cooker markets in the US/Mexico and the UK, with enhanced potential to strengthen its position both in these markets and in the rest of Europe." Buckland said no job losses were anticipated.