With the acquisition of Glassman High Voltage, XP Power Ltd (LON:XPP) continues in its quest to expand its product portfolio to include high-voltage and high-power products. The acquisition should help XP to further penetrate key accounts, as well as adding new customers. XP is paying £31.8m in cash, funded by extending the company’s credit facility, and expects the deal to be earnings enhancing in FY18. We increase our FY18 and FY19 normalised EPS forecasts by 3.6% and 6.1% respectively. We forecast a net debt/EBITDA ratio of 0.8x at end FY18, well below the company’s 2.0x ceiling.
Extending the product portfolio
XP Power has agreed to acquire Glassman High Voltage, a US-based designer and manufacturer of high-voltage, high-power conversion products. This extends XP’s product portfolio to include products that supply both high-power and high-voltage, complementing EMCO’s high-voltage, low-power products and Comdel’s RF power products. With limited sales capability of its own, Glassman products will be marketed by XP’s salesforce. While Glassman has some customers in common with XP, there is no overlap in terms of products sold to those customers, and it brings several new customers to the group.
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