Expanding into high-voltage products
With the acquisition of EMCO for £7.8m, XP Power Ltd (L:XPP) is expanding its product range to encompass high-voltage products. EMCO brings new verticals and new customers to the group, and should benefit from access to XP’s sales channels. The company expects the deal to be earnings accretive in FY16 – we upgrade our FY15e EPS by 0.2% and FY16e EPS by 1.4%.
Expanding the product range
XP has acquired EMCO High Voltage Corporation (EMCO), a privately owned designer and manufacturer of high-voltage power modules, with a specialism in low-power designs. EMCO is based in California and has manufacturing operations in Nevada. With its focus on standard and modified standard products, EMCO’s business model is a good fit with XP. There is no overlap with XP’s product range, although the two companies do have some customers in common.
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