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Greatbatch Closes Micro Power Buy - Analyst Blog
12/19/2011 3:40:00 PM
Greatbatch 's ( GB ) Electrochem division, which makes high performance commercial batteries, has wrapped up its recently announced acquisition of Oregon-based battery supplier Micro Power Electronics for roughly $60 million in cash.
Greatbatch funded the acquisition with available cash and $45 million in a revolving credit facility. In addition to the purchase consideration, Electrochem also assumed debt and incurred specific acquisition-related payments and expenses.
Micro Power supplies custom battery solutions to the portable medical, military and automatic identification and data collection markets. Its product portfolio complements Electrochem's offerings for the portable medical, energy, military and environmental industries.
The acquisition will diversify Electrochem's revenues by broadening its foothold in the portable medical battery market and stimulating growth in other key areas. Electrochem plans to retain Micro Power's Oregon facility ,which employs roughly 200 people.
Micro Power is expected to generate roughly $70 million in sales in 2011. The acquisition is expected to be neutral to Greatbatch's earnings (barring one-time acquisition related charges) in 2011 and 2012 and accretive thereafter.
Greatbatch is a leading producer and supplier of batteries, capacitors and components used in implantable medical devices. The company's top customers include Boston Scientific ( BSX ), Johnson & Johnson ( JNJ ), Medtronic ( MDT ) and St. Jude ( STJ ).
Greatbatch has been acquiring complementary businesses over the last few years to boost sales. The company's pipeline is healthy with a number of products currently under development that are expected to support growth in the long run. Our Outperform recommendation on the stock is supported by a Zacks #2 Rank, which translates into a short-term Buy recommendation.
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