Toronto-based Celestica Inc., said Wednesday it's buying three IBM circuit board plants for $500 million US and has struck supply deals with the company worth $1.5 billion US annually.

The plants are in Rochester, Minn., and Vimercate and Santa Palomba, Italy. About 1,800 employees from IBM's Enterprise Systems Group and Microelectronics Division will join Celestica, a spinoff from IBM which is now part of conglomerate Onex Corp.

Under the deal, Celestica will supply IBM with a range of electronics manufacturing services ranging from supply chain management to prototype testing and support.

The deal includes fees for intellectual property rights and asset transfers from IBM's enterprise systems group and its microelectronics division.