READING, Pa. - EnerSys (NYSE:ENS), a global leader in industrial stored energy solutions, has announced an agreement to acquire Bren-Tronics, Inc., a manufacturer of portable power solutions for military applications, in a $208 million all-cash transaction. The deal, which is expected to close in the second calendar quarter of 2024, will see Bren-Tronics integrated into EnerSys's Specialty Aerospace & Defense business line.
The acquisition is projected to be immediately accretive to EnerSys's earnings per share upon closing, which is subject to regulatory approvals and customary closing conditions. EnerSys plans to fund the purchase with existing cash reserves.
Bren-Tronics, based in Commack, N.Y., employs approximately 280 people across the U.S., France, and the U.K., and reported 2023 sales of around $100 million. The company, founded in 1973, specializes in small and large format lithium batteries and charging systems, primarily serving the defense sector.
David M. Shaffer, President & CEO of EnerSys, praised Bren-Tronics's products and noted the companies' five-year history of collaboration with the U.S. Department of Defense (DOD). He emphasized the strategic fit between the two companies, highlighting the complementary product portfolios and shared company cultures. Shaffer expressed enthusiasm for integrating Bren-Tronics's engineering capabilities to drive innovation and strengthen the relationship with the DOD.
Mark Matthews, President of EnerSys's Specialty Global, pointed out that the acquisition aligns with EnerSys's strategic initiative to expand its lithium product offerings and is in line with the company's fiscal year 2027 targets. The forthcoming lithium cell gigafactory is expected to support the increased product volume.
Sai W. Fung, President and CEO of Bren-Tronics, expressed optimism about joining EnerSys, citing the opportunity to combine strengths to address energy storage challenges for the DOD and to continue Bren-Tronics's legacy of reliability and innovation.
InvestingPro Insights
As EnerSys (NYSE:ENS) sets its sights on expanding within the defense sector through the acquisition of Bren-Tronics, Inc., the company's financial health and market performance provide additional context for potential investors. According to InvestingPro data, EnerSys boasts a market capitalization of $3.72 billion, reflecting its substantial presence in the industrial energy solutions market. The company's P/E ratio stands at 13.67, which may suggest an attractive valuation to investors, especially when considering the company's near-term earnings growth prospects. In fact, the adjusted P/E ratio is projected to improve to 11.92 over the last twelve months as of Q3 2024, indicating potential for increased profitability.
An InvestingPro Tip highlights that EnerSys has a history of rewarding its shareholders, maintaining dividend payments for 12 consecutive years, with a dividend yield of 0.99% as of the last date on record. Furthermore, the company's dividend growth over the last twelve months as of Q3 2024 is a robust 28.57%. This commitment to returning value to shareholders is a reassuring sign for those considering an investment in the company.
Moreover, analysts predict that EnerSys will be profitable this year, with net income expected to grow. This is a promising sign for the company's financial outlook, especially as it prepares to integrate Bren-Tronics into its operations. However, it's worth noting that four analysts have revised their earnings downwards for the upcoming period, suggesting that investors should keep an eye on future earnings reports and company guidance for any changes to the financial landscape.
For those interested in further analysis and additional InvestingPro Tips, EnerSys's profile on Investing.com offers more in-depth information, including the fact that the company operates with a moderate level of debt and its liquid assets exceed short-term obligations—indicative of financial stability. With an additional 8 InvestingPro Tips available for EnerSys, investors can gain a more comprehensive understanding of the company's financial position and market potential. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking valuable insights that could inform your investment decisions.
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