Bel Fuse to Acquire Majority Stake in Enercon Technologies for $400 Million

By Tamara Parker • Thursday, September 19 08:07 • Permanent Link

Bel Fuse Inc. has announced its agreement to acquire a majority stake in Enercon Technologies, Ltd. from Fortissimo Capital for an enterprise value of $400 million. The acquisition is expected to significantly expand Bel's presence in the higher-margin aerospace and defense markets. Here are some key points from the announcement:

Bel's exposure to the aerospace and defense end market is expected to increase from 17.5% to 31% of total revenue based on the last twelve months (LTM) Q2 2024 figures.
Enercon's gross margin for LTM Q2 2024 was reported at 46.0%, and its adjusted EBITDA margin was 32.5%, both ahead of Bel's historical margin profile.
The acquisition is expected to be accretive to Bel's GAAP EPS within one year post-close and to Bel's non-GAAP EPS on day 1.
Bel expects the net leverage to be under 2.0x within one quarter from the close of the transaction as T-bills mature.

Enercon Technologies is a leading supplier of highly engineered power conversion and networking solutions to aerospace and defense markets globally, with LTM Q2 2024 sales of $111 million.

Bel intends to finance the acquisition through a combination of cash on hand and an expansion of its existing credit facility.

The transaction is expected to be completed by the end of 2024, subject to customary closing conditions and regulatory approvals.

Bel has scheduled a conference call for further details on the transaction on Thursday, September 19, 2024.

Bel Fuse Inc. designs, manufactures, and markets a broad array of products primarily used in various industries including networking, telecommunications, computing, aerospace, transportation, and e-mobility industries.

Further financial details, including GAAP and non-GAAP measures, are available in the official press release. Following these announcements, the company's shares moved 0.6%, and are now trading at a price of $90.93. For the full picture, make sure to review Bel Fuse's 8-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.