XP Power Ltd (LSE:XPP) has acquired a pair of German businesses, FuG Elektronik and Guth High Voltage, for £32.8mln (€39mln) in cash.
With the acquisition of two complementary firms, the maker of electronics industry power solutions said it will increase its market share in Germany, its industry’s largest geographical market.
The acquisition will boost margins and earnings in 2022, according to the FTSE 250-listed company, which said the acquisition from Dr Simon Consulting GmbH was financed by existing debt facilities and is subject to customary working capital adjustments.
For the year ended December 31, 2021, FuG and Guth are said to be expecting revenue of about €18mln and adjusted EBITDA of nearly €4.5mln.
As well as around 150 employees, the acquisitions bring into the fold a new design and manufacturing centre in Europe for Singapore-based XP, with Guth and FuG operating from two sites on the edge of Stuttgart and Munich.
Gavin Griggs, CEO of XP Power, said FuG and Guth's high voltage offerings “are an excellent fit with our existing operations, adding wholly new and highly complementary technical capabilities.”
FuG and Guth's management team will join XP Power.
XP Power said its net debt/EBITDA ratio is expected to be lower than 1.0x at FY22 year-end upon closing the deal.