Advanced Energy Makes £571m Cash Offer to Acquire XP Power

Advanced Energy Industries (NASDAQ: AEIS), a precision power conversion, measurement, and control solutions company, announced a potential all-cash offer to acquire XP Power Limited (LON: XPP) for £571 million on Tuesday. 

The proposed offer of £19.50 per share follows three previous all-cash proposals that were submitted and subsequently rejected by the XP Power Board.

The progression of Advanced Energy's offers began with a £17 per share proposal in October 2023, valuing XP Power's equity at £339 million. This was followed by an increased offer of £18.50 per share in November 2023, raising the equity valuation to £369 million. 

The latest proposal of £19.50 per share reflects a 68% premium over XP Power's May 20 closing price of £11.64 and an 82% premium over its 30-day volume-weighted average price.

Despite the rejections, Advanced Energy believes the offer presents a highly attractive opportunity for XP Power's shareholders, particularly in light of the company's recent equity raise and trading update. Advanced Energy intends to fund the acquisition with cash available on its balance sheet.

Advanced Energy CEO Steve Kelley highlighted that the acquisition aligns with his company's growth strategy and would enhance its product portfolio, reduce cyclicality, and accelerate innovation. 

“By expanding our portfolio of products and technologies and combining our technical capabilities, we believe we will be better able to meet the growing needs of our customers,” said Kelley.

If a deal were to go through, the potential combined entity would aim to compete more effectively in the precision power industry, offering broader resources and greater opportunities for employees.

Advanced Energy said it would welcome the opportunity to engage in a constructive dialogue with XP Power to advance the proposal, which it believes provides “compelling value for both Advanced Energy's and XP Power's shareholders.”