Advanced Energy to acquire Artesyn Embedded Power for $400M
Advanced Energy (AEIS) announced that it has entered into a definitive agreement to acquire the Embedded Power business of Artesyn Embedded Technologies from Platinum Equity.
The total consideration for this transaction will be approximately $400M.
Strategic benefits of the deal include:
“Creates a premier global power conversion company with enabling critical power technologies and over $1.3B in annual revenue, based on 2018 combined historical results.
Strong strategic fit with complementary technologies, product portfolios and core competencies in highly engineered, application-specific power solutions for key OEMs in demanding applications.
Accelerates earnings growth with over $20M of expected annualized synergies, driving projected earnings accretion of over 80c per share in 18-24 months and targeting to reach long-term accretion of over $1.50 per share, on a non-GAAP basis.
Creates significant financial value with a purchase price of approximately 5x synergy-adjusted EBITDA, with a path to future margin expansion, additional cost savings and de-levering to create long-term shareholder value.”
Under the terms of the Share Purchase Agreement, based on a total base purchase price of $400M, Advanced Energy will pay approximately $364M in cash and assume approximately $36M of liabilities for Artesyn EP, subject to final adjustments to the valuation of such liabilities and adjustments to reflect working capital as of the closing.
AE expects to finance the transaction through a combination of existing cash and $350N of debt supported by commitments from its lenders. The transaction has been approved by the board of Advanced Energy.
The transaction, which is expected to close during the second half of 2019, is subject to the satisfaction of customary closing conditions, including receipt of international regulatory approvals and completion of certain carve out activities involving Artesyn’s Embedded Computing and Consumer Products businesses.
AEIS +$4.38 to $52.84.
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