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AE to power up a deal with Artesyn EP
Posted on Wednesday, 15 May 2019 13:27
Advanced Energy Industries (AE) is buying the embedded power business of US-based Artesyn Embedded Technologies, from Platinum Equity for around USD 400.00 million.

The purchase price consists of USD 364.00 million in cash and USD 36.00 million in liabilities, which will be funded through existing cash and USD 350.00 million of the purchaser’s debt.

However, the deal does not include Artesyn’s embedded computing and consumer products businesses.

Artesyn EP, as the embedded power unit is known, is billed as one of the world’s largest power supply companies, with an alternating current and direct current portfolio that covers a power range from three watts to 24 kilowatts.

The target’s products include open-frame and enclosed models, rack-mounting bulk front end units and external power adapters.

It serves a range of markets such as hyperscale data centres, telecommunication infrastructure in next generation 5G networks and embedded industrial power applications, among others.

Yuval Wasserman, chief executive of AE, said: “Artesyn EP fits perfectly into our diversification strategy by adding a broad set of new growth verticals, industry leading power technologies, deep customer relationships and a world-class team.

“AE’s semiconductor customers will also benefit from the expanded capabilities, broadened product offerings and increased stability and scale.”

With a purchase price of around 5.0x synergy-adjusted earnings before interest, taxes, depreciation and amortisation, the deal will allow opportunities for future margin expansion and cost savings.

Furthermore, the transaction is expected to generate over USD 20.00 million in annual synergies which will help drive projected earnings of USD 0.80 per share over the next 18 to 24 months.

Subject to closing conditions and international regulatory approvals, the purchase is slated to complete during the second half of 2019.

Jay Geldmacher, chief executive of Artesyn, said: “Together with AE, we form a consolidated platform with a synergistic and complementary product portfolio, which expands our industrial business into semiconductor markets and provides our existing customers access to new technologies.”

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 87 deals targeting all other miscellaneous electrical equipment and component manufacturers announced worldwide since the beginning of 2019.

Heading the list was NVDIA agreeing to buy Israel’s Mellanox Technologies for USD 6.90 billion.

© Zephus Ltd