Advanced Energy Industries Offers £19.50 per Share for XP Power

Advanced Energy Industries, Inc. (NASDAQ: AEIS) has announced a possible offer to acquire XP Power Limited (LSE: XPP) at £19.50 per share in cash. This latest proposal represents a 68% premium to XP Power's closing share price of £11.64 as of May 20, 2024. It also reflects a 82% premium to XP Power's 30-trading day volume weighted average price of £10.74 as of the same date.

The total proposed consideration of the latest proposal is £571 million, based on the fully-diluted share count of 24.0 million ordinary shares, reported net debt of £103.4 million at the end of March 31, 2024, and no further dividends to be declared or paid after this announcement. Advanced Energy intends to fund the acquisition with cash available on its balance sheet.

The proposed offer has increased over time, with the latest proposal at £19.50 per share representing a 15% increase to the October 24, 2023 proposal of £17.00 per share, and a 5% increase to the November 5, 2023 proposal of £18.50 per share. These increases reflect significant premiums to XP Power's closing share prices on the respective trading days before the offers were submitted, and substantial increases to XP Power's implied equity value reflecting the increased number of shares following the fundraising.

Steve Kelley, the President and CEO of Advanced Energy, stated that the proposed offer for XP Power provides compelling value for both Advanced Energy's and XP Power's shareholders. He emphasized that by expanding their portfolio of products and technologies, they believe they will be better able to meet the growing needs of their customers.

The proposed acquisition is consistent with Advanced Energy's strategy to focus on precision power and deliver more value to customers in industrial, medical, and semiconductor applications. If completed, the acquisition will extend Advanced Energy's ability to serve its customers with a broader and deeper set of products and technologies, offering opportunities for Advanced Energy to grow its earnings and expand its gross margins.

There is no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made. However, Advanced Energy has undertaken to announce a firm intention to make an offer for the shares of XP Power in accordance with the applicable regulations.

Advanced Energy Industries, Inc. is a global leader in the design and manufacture of highly engineered, precision power conversion, measurement, and control solutions for mission-critical applications and processes. It is headquartered in Denver, Colorado, USA. As a result of these announcements, the company's shares have moved 0.0% on the market, and are now trading at a price of $107.88. Check out the company's full 8-K submission here.

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