EnerSys (NYSE: ENS) announced today that it has completed its
acquisition of the Alpha Technologies Group of companies (the
“Alpha Group”). The acquisition of the Alpha Group will accelerate
and advance EnerSys’ competitive position and enable it to deliver
an expanded product portfolio across the broadband, telecom,
renewable and industrial markets.
“We are very excited to have quickly closed this
important transaction and can officially welcome Alpha to the
EnerSys family,” said EnerSys President and Chief Executive Officer
David M. Shaffer. “EnerSys’ combination with Alpha creates the only
fully-integrated DC power and energy storage solution provider for
broadband, telecom and energy storage systems, enabling us to offer
a uniquely differentiated value proposition to the marketplace.
This offering will allow EnerSys to further penetrate existing
applications, expand into new markets and better retain business
over time.”
Shaffer added, “Our acquisition of Alpha will
allow EnerSys to achieve meaningful economies of scale in the short
term, while simultaneously increasing our leadership position in a
growing market with attractive secular trends. With an expanded
total addressable market of approximately $20 billion, combined
with an extremely robust product and service offering following the
Alpha transaction, we are well positioned to deliver long-term
growth and value for our shareholders.”
EnerSys expects the acquisition to generate
annual run-rate synergies in excess of $25 million and to be
accretive to EnerSys’ earnings, excluding any one-time or
acquisition related costs. Under the terms of the acquisition
agreement, EnerSys acquired the Alpha Group for $750 million
consisting of $650 million in cash and $100 million in EnerSys
shares. The equity component of the consideration resulted in Fred
Kaiser, the Alpha Group’s founder, owning approximately 3% of
EnerSys following the acquisition.
In order to finance the cash portion of the
acquisition, EnerSys entered into an Incremental Term Loan Lender
Joinder Agreement, Increase Agreement and First Amendment to Credit
Agreement pursuant to which, among other things, EnerSys and
certain of its subsidiaries incurred incremental term loans of $300
million, and completed an amendment of its existing revolving
credit agreement that increases its borrowing capacity under the
revolving facility from $600 million to $700 million. In addition,
EnerSys will utilize $200 million of its cash balances.
EnerSys retained Goldman Sachs & Co. and
Evercore as financial advisors and Holland & Knight LLP and
Reed Smith LLP as legal advisors on the transaction. The Alpha
Group retained William Blair as financial advisor and Baker
McKenzie as legal advisor.
Forward Looking Statements
Caution Concerning Forward-Looking
Statements
This press release contains statements which, to
the extent that they are not recitations of historical fact may
constitute forward-looking statements for purposes of the
Securities Act of 1933, as amended (the “Securities Act”), and the
Securities Exchange Act of 1934, as amended. Such forward-looking
statements may include financial and other projections as well as
statements regarding EnerSys’ future plans, objectives,
performance, revenues, growth, profits, operating expenses or
EnerSys’ underlying assumptions. The words “may,” “would,”
“should,” “could,” “will,” “likely,” “possibly,” “expect,”
“anticipate,” “intend,” “indicate,” “estimate,” “target,”
“potentially,” “promising,” “probably,” “outlook,” “predict,”
“contemplate,” “continue,” “plan,” “forecast,” “project,” “are
hopeful,” “are optimistic,” “are looking,” “are looking forward”
and “believe” or other similar words and phrases may identify
forward-looking statements. Persons reading this press release are
cautioned that such statements are only predictions, and that
EnerSys’ actual future results or performance may be materially
different.
Such forward-looking statements involve known
and unknown risks and uncertainties. A number of factors could
cause actual results, events or developments, or industry results,
to be materially different from any future results, events or
developments expressed, implied or anticipated by such
forward-looking statements, and our business and financial
condition and results of operations could be materially and
adversely affected. In addition to factors previously disclosed in
EnerSys’ reports filed with the U.S. Securities and Exchange
Commission (the “SEC”), such factors include, among others: that
the parties are unable to successfully implement integration
strategies; the risks associated with the increased leverage
undertaken by EnerSys as a result of the acquisition; the effect of
the acquisition on (i) relationships with the parties’ historical
customers, suppliers and strategic partners and their operating
results and businesses generally (including the diversion of
management time on integration-related issues), (ii) competition
and competitive strategies, including each party’s historical
competitors, and (iii) the parties’ ability to retain and hire key
personnel; that the integration of the acquired business with
EnerSys may take longer than anticipated or be more costly to
complete and that the anticipated benefits, including any
anticipated cost savings or strategic gains may be significantly
harder to achieve or take longer than anticipated or may not be
achieved; the potential negative effects of the acquisition on the
market price of EnerSys’ common stock; the potential impact of the
acquisition on EnerSys’ future tax rate and payments based on the
consolidation of the global Alpha Group and its ability to quickly
integrate foreign operations; the potential that EnerSys’ due
diligence did not uncover risks and potential liabilities
associated with the Alpha Group; fluctuations in foreign exchange
rates; and slowdowns or downturns in economic conditions generally
and in the markets in which EnerSys operates.
All forward-looking statements and information
set forth herein are based on management’s current beliefs and
assumptions as of the date hereof and speak only as of the date
they are made. EnerSys does not undertake to update forward-looking
statements. Although EnerSys does not make forward-looking
statements unless it believes it has a reasonable basis for doing
so, EnerSys cannot guarantee their accuracy. The foregoing
factors, among others, could cause actual results to differ
materially from those described in these forward-looking
statements. No undue reliance should be placed on any
forward-looking statements.
For a complete discussion of the assumptions,
risks and uncertainties related to EnerSys’ business, you are
encouraged to review its filings with the SEC, including the most
recent Annual Report on Form 10-K, as updated by quarterly or other
reports subsequently filed with the SEC.
About EnerSys
EnerSys, the global leader in stored energy
solutions for industrial applications, manufactures and distributes
reserve power and motive power batteries, battery chargers, power
equipment, battery accessories and outdoor equipment enclosure
solutions to customers worldwide. Motive power batteries and
chargers are utilized in electric forklift trucks and other
commercial electric powered vehicles. Reserve power batteries
are used in the telecommunication and utility industries,
uninterruptible power supplies, and numerous applications requiring
stored energy solutions including medical, aerospace and defense
systems. Outdoor equipment enclosure products are utilized in
the telecommunication, cable, utility and transportation
industries and by government and defense customers. EnerSys
also provides aftermarket and customer support services to its
customers from over 100 countries through its sales and
manufacturing locations around the world.
More information regarding EnerSys can be found
at www.EnerSys.com.
About the Alpha Technologies Group of
Companies
Additional information regarding the Alpha Group
can be found at www.Alpha.com. For more information about the
Alpha Group acquisition, please contact Thomas O'Neill, Vice
President and Treasurer, EnerSys, P.O. Box 14145, Reading, PA
19612-4145, USA, by telephone at 610-236-4040 or by emailing
investorrelations@enersys.com.
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