XP Power buys US-based Comdel for $23m

XP Power has acquired US-based Comdel, a designer and manufacturer of radio frequency power supplies, for $23m in cash on a debt-free and cash-free basis.

The acquisition - which is expected to be enhancing to the company's earnings per share in 2018 - was funded with a new revolving credit facility of $40m, with a $20m additional accordion option.

Based in Massachussetts, Comdel supplies the industrial and technology sectors with a range of standard, modified and custom high power radio frequency power conversion products. It typically supplies RF power supplies to the semiconductor, thin film, photovoltaics, and induction heating industries.

In the fiscal year ended 31 December 2016, it generated sales of $16.5m and pre-tax profit of $1.8m and had gross assets of $10.9m.

XP said the companies share several customers and while there is no direct overlap in product lines, the power supply solutions of both are considered highly complementary.

XP Power's chief executive, Duncan Penny, said: "We are delighted to welcome Comdel to the XP Power Group and are excited about the opportunity of offering its complementary product range through our global sales channel.

"The acquisition will enable us to provide our existing customers with a comprehensive product offering in RF power, a market segment with robust demand fundamentals but one in which we did not previously specialise. We are confident that Comdel will have a very successful future as part of XP Power."

At 0925 BST, the shares were up 1.1% to 2,805.81p.