WEST ORANGE, N.J., Sept. 18, 2024 (GLOBE NEWSWIRE) — Bel Fuse Inc. (Nasdaq:BELFA and Nasdaq:BELFB), today announced that it has entered into a definitive agreement to acquire a majority stake in Enercon Technologies, Ltd. from Fortissimo Capital based on an enterprise value of $400 million. Bel will acquire an 80% stake upfront for $320 million in cash, plus up to $10 million 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.
Transaction highlights:
- Expands Bel’s exposure to the aerospace and defense end market from 17.5% to 31% of total revenue, based on LTM Q2 2024
- Enercon gross margin of 46.0% and Adjusted EBITDA margin of 32.5% for LTM Q2 2024, ahead of Bel’s historical margin profile
- Expected to be accretive to Bel’s GAAP EPS within one-year post-close, and to Bel’s non-GAAP EPS on Day 1
- Expected net leverage of under 2.0x within one quarter from close, as T-bills mature
Enercon is a leading supplier of highly engineered power conversion and networking solutions to aerospace and defense markets globally, providing robust and reliable solutions across air, land and sea applications. This acquisition will allow Bel to extend its product portfolio supporting the aerospace and defense markets to include power solutions, with clear 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 talented 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.
Daniel Bernstein, CEO of Bel, stated, “The acquisition of Enercon will extend Bel’s Power segment into the aerospace and defense end markets, deepening our partnership with customers who support critical applications. The addition will result in 30% of Bel’s Power segment revenue and approximately 37% of consolidated Bel revenue supporting the aerospace and defense end markets. We are excited to work with the Enercon management team and Fortissimo in growing the business in the years to come.”
Eyal Shary, CEO of Enercon, said, “I am very excited for the next chapter of Enercon to be with a strategic partner that can expand and globalize the business. Our immensely talented team will be additive to Bel and looks forward to joining our new home.”
Shmoulik Barashi and Yochai Hacohen, both Enercon board members and partners at Fortissimo Capital, commented, “Fortissimo Capital is proud to have partnered with the Enercon team and to have played a role in the company’s rapid growth since its investment. We are confident in Enercon’s potential and the prospect of continued global expansion. We are excited to welcome Bel to lead and accelerate the further growth of Enercon.” Shmoulik and Yochai will continue to be members of the Enercon board post transaction.
Bel intends to finance the acquisition through a combination of cash on hand and an expansion of its existing credit facility.
About Enercon Technologies
Enercon (https://enercon.co.il) is headquartered in Netanya, Israel with manufacturing sites also located in North America and India. Enercon is a leading supplier of highly engineered power conversion and networking solutions to military and aerospace markets globally. The company typically operates as the sole supplier of its products, providing robust and reliable solutions across air, land and sea applications. The full business has LTM Q2 2024 sales of $111 million with gross profit margin of 46%. Enercon will operate independently under the Bel Power and Solutions segment.
About Fortissimo Capital
Fortissimo Capital (www.ffcapital.com) is a leading private equity fund in Israel investing primarily in technology and industrial companies. Fortissimo’s investment strategy is to achieve capital appreciation through taking a leading role and active approach in Israeli-related global businesses that require immediate and significant change, or stimulation of growth and by building business fundamentals to facilitate sustainable long-term growth and value creation. Some of Fortissimo’s notable exits include: Kornit Digital IPO; SodaStream IPO; the sale of Diptech to Ferro, the sale of Nur Macroprinters to Hewlett Packard, the sale of Cadent to Align Inc., the sale of Breezometer to Google, the sale of Starhome to Telerix, the sale of Cardo to EMK, the sale of Biological Industries to Sartorius AG, and the sale of AOD Software Inc. to Primus Capital.
