Bel Closes on Acquisition of CUI Inc. Power Assets
December 03 2019 - 3:14PM
Bel Fuse Inc. (“Bel,” or, “the Company”)
(Nasdaq:BELFA and Nasdaq:BELFB), a leading supplier of products
that power, protect and connect electronic circuits, today
announced that the Company has closed on its previously-announced
asset purchase agreement (the “Agreement”) with CUI Global Inc.
(Nasdaq:CUI) related to the purchase of the majority of the power
business of CUI Inc.
The acquired business had trailing twelve-month
sales of approximately $37 million and is expected to be accretive
to Bel’s consolidated net earnings by the second quarter of
2020. Gross margins (unaudited) are higher than Bel’s
historical range, and the combination is expected to yield annual
cost synergies of approximately $500,000. Bel will continue
to operate the business from CUI Inc.’s leased ISO
9001:2015-certified facility in Tualatin, Oregon.
Transaction BenefitsThe
well-known CUI Inc. power brand will join Bel Power Solutions as
leading power supply and conditioning brands in the Bel Power
portfolio. We believe that the combination of Bel and the CUI
Inc. power business will:
- Increase Bel’s presence in the
distribution channel, making us the top supplier for power products
at one of the major electronic catalog distributors
- Unite complementary capabilities,
sales channels and customer relationships
- Broaden our Power Product Portfolio
giving us a full range of products to support all our customer
power needs
- Enhance our gross margin profile
and make a positive contribution to our net earnings
- Provide alternative business models
and strategies to analyze and potentially implement on a broader
scale
- Produce cost synergies, $500,000 of
which have been identified to date
The Company paid $32 million in cash for the CUI
Inc. power business acquired under the terms of the Agreement.
About BelBel (www.belfuse.com)
designs, manufactures and markets a broad array of products that
power, protect and connect electronic circuits. These
products are primarily used in the networking, telecommunications,
computing, military, aerospace, transportation and broadcasting
industries. Bel's product groups include Magnetic Solutions
(integrated connector modules, power transformers, power inductors
and discrete components), Power Solutions and Protection
(front-end, board-mount and industrial power products, module
products and circuit protection), and Connectivity Solutions
(expanded beam fiber optic, copper-based, RF and RJ connectors and
cable assemblies). The Company operates facilities around the
world.
Forward-Looking Statements
Non-historical information contained in this press release
(including the statements regarding the anticipated impact of the
CUI Inc. power business acquisition on Bel's growth and
profitability and on Bel’s competitive position, the expected
accretive nature of the acquisition, the expected effects of the
acquisition on distribution channels, sales channels and customer
relationships, the expected impact on Bel’s gross margin and
consolidated net earnings from the CUI Inc. power business and
anticipated synergies of the combined businesses) are
forward-looking statements (as described under the Private
Securities Litigation Reform Act of 1995) that involve risks and
uncertainties. Actual results could differ materially from Bel's
projections. Among the factors that could cause actual results to
differ materially from such statements are: the market concerns
facing our customers; the continuing viability of sectors that rely
on our products; the effects of business and economic conditions;
difficulties associated with integrating recently acquired
companies and businesses, including the CUI Inc. power business;
capacity and supply constraints or difficulties; product
development, commercialization or technological difficulties; the
regulatory and trade environment; risks associated with foreign
currencies; uncertainties associated with legal proceedings; the
market's acceptance of the Company's new products and competitive
responses to those new products; our ongoing evaluation of the
consequences of the U.S. Tax Cuts and Jobs Act; the impact of
changes to U.S. trade and tariff policies; and the risk factors
detailed from time to time in the Company's SEC reports. In light
of the risks and uncertainties impacting our business, there can be
no assurance that any forward-looking statement will in fact prove
to be correct. We undertake no obligation to update or revise any
forward-looking statements.
Investor Contact:Peter Seltzberg, Managing
DirectorDarrow Associatestel
516.419.9915pseltzberg@darrowir.com |
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Company Contact:Daniel
BernsteinPresidentir@belf.com |
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