LONDON, UK: Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader in precision power conversion, has made a public offer to acquire XP Power Limited (LSE: XPP). The offer, detailed in a series of escalating bids, culminated in a £19.50 per share cash proposal, valuing XP Power’s equity at a staggering £468 million.
The journey to this proposal began on October 24, 2023, with an initial bid of £17.00 per share, followed by a second offer on November 5, 2023, at £18.50 per share. Despite these generous offers, the Board of XP Power unanimously rejected each, leading to the latest proposal made on May 7, 2024.
This latest bid represents a 68% premium over XP Power’s closing share price as of May 20, 2024, and an 82% premium to the 30-trading day volume weighted average price. It also marks a significant increase over the previous proposals, reflecting the increased number of shares following XP Power’s equity raise on November 6, 2023.
The total consideration of the latest proposal stands at £571 million, which includes the assumption of XP Power’s reported net debt of £103.4 million. Advanced Energy plans to fund this acquisition using the cash available on its balance sheet, which boasts over $1.0 billion.
The acquisition is seen as a strategic move for Advanced Energy, aligning with its growth strategy to focus on precision power and deliver more value to customers across Industrial, Medical, and Semiconductor applications. The integration of XP Power’s engineering capabilities and product portfolio is expected to complement Advanced Energy’s existing technology base, providing a broader set of products and technologies, especially for semiconductor equipment use cases.
Steve Kelley, the president and CEO of Advanced Energy, expressed confidence in the proposal, stating, “By expanding our portfolio of products and technologies, and combining our technical capabilities, we believe we will be better able to meet the growing needs of our customers.”
Advanced Energy’s shareholders have been advised that no action is required at this time, as the company awaits a constructive dialogue with the Board of XP Power and the opportunity to perform necessary due diligence.
The proposed acquisition promises to create significant long-term value for shareholders, grow earnings, and expand gross margins, marking a pivotal moment in the precision power industry.