Bel Fuse to acquire Enercon Technologies from Fortissimo Capital for $400M

Bel Fuse announced that it has entered into a definitive agreement to acquire a majority stake in Enercon Technologies from Fortissimo Capital based on an enterprise value of $400M. Bel will acquire an 80% stake upfront for $320M in cash, plus up to $10M of potential earnout payments for the 2025-2026 period, with the intent to purchase the remaining 20% by early 2027 based on future EBITDA performance. Enercon gross margin of 46% and adjusted EBITDA margin of 32.5% for LTM Q2 2024 is ahead of Bel’s historical margin profile. The transaction is expected to be accretive to Bel’s GAAP EPS within one-year post-close, and to Bel’s non-GAAP EPS on Day 1. The transaction is also expected to have net leverage of under 2.0x within one quarter from close, as T-bills mature. Enercon is a supplier of highly engineered power conversion and networking solutions to aerospace and defense markets globally. This acquisition will allow Bel to extend its product portfolio supporting the aerospace and defense markets to include power solutions, with potential cross selling opportunities in the future. Bel’s manufacturing footprint will expand further into India and the U.S. and there will be new manufacturing capabilities and a group of engineers based in Israel. The transaction is expected to be completed by the end of 2024 and is subject to customary closing conditions, including applicable regulatory approvals. Bel intends to finance the acquisition through a combination of cash on hand and an expansion of its existing credit facility.