Advanced Energy (AEIS) Raises Offer to Buy XP Power Limited

Advanced Energy AEIS recently announced a possible cash offer of £19.50 per share to acquire the entire issued and to be issued shares of XP Power Limited to bolster its position in the precision power industry.

The offer follows three previous all-cash proposals to XP Power’s board, progressively increasing from £17.00 on Oct 24, 2023, to £18.5 on Nov 5, 2023, and finally to £19.50 on May 7, 2024, valuing XP Power's equity at £468 million.

The offer represents a 68% premium to XP Power's closing price as of May 20, 2024.

With a total proposed consideration of £571 million, this move aligns with Advanced Energy’s aim to leverage XP Power’s engineering capabilities and extensive product portfolio to enhance its offerings across various end markets, including industrial, medical and semiconductor applications.

Advanced Energy Industries, Inc. Price and Consensus


Advanced Energy Industries, Inc. Price and Consensus

Advanced Energy Industries, Inc. price-consensus-chart | Advanced Energy Industries, Inc. Quote


Expanding Portfolio Aids Prospect

Advanced Energy’s expanding portfolio across semiconductor and industrial and medical end-markets has been noteworthy.

In first-quarter 2024, AEIS secured major design wins in the semiconductor market for its next-generation plasma power products, namely the eVoS and eVerest.

Expanding its footprint further, the company also secured design wins in industrial and medical applications, such as medical imaging, electrosurgery, and warehouse automation.

In March, AEIS launched Evergreen, its advanced modular high-power platform in the Industrial and Medical segment. It features two new air-cooled Vento products, catering to diverse industry demands with increased efficiency and power density.

However, the sluggish demand environment across the non-semi markets, notably the Data Center Computing and Telecom and Networking markets, due to reduced infrastructure investments and high inventory levels are major concerns.

For second-quarter 2024, Advanced Energy anticipates revenues of $350 million (+/- $20 million). The Zacks Consensus Estimate for revenue is pegged at $339.4 million, suggesting a year-over-year decline of 18.32%.

For second-quarter 2024, Advanced Energy expects non-GAAP earnings of 73 cents per share (+/- 25 cents). The Zacks Consensus Estimate for earnings is pegged at 73 cents per share, indicating a decline of 34.23%.

Zacks Rank & Stocks to Consider 

Currently, Advanced Energy has a Zacks Rank #5 (Strong Sell). 

The company’s shares have dropped 1.1% year to date against the Zacks Computer & Technology sector’s rise of 16.5%.

Some better-ranked stocks in the broader technology sector are Arista Networks ANET, CrowdStrike CRWD and Intuit INTU. ANET sports a Zacks Rank #1 (Strong Buy), whereas CRWD and INTU carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Shares of Arista Networks have gained 34.6% in the year-to-date period. The long-term earnings growth rate for ANET is 15.68%. 

CrowdStrike’s shares have gained 36.8% in the year-to-date period. The long-term earnings growth rate for CRWD is currently projected at 22.31%. 

Shares of Intuit have gained 6.9% in the year-to-date period. The long-term earnings growth rate for INTU is 14.57%

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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