MALVERN, Pa. - Vishay Intertechnology, Inc. (NYSE:VSH) announced today its plans to acquire Birkelbach Kondensatortechnik GmbH, a German manufacturer specializing in metalized technical films used in capacitors, for approximately $18.5 million. The all-cash transaction is expected to be finalized by December 31, 2024, pending customary closing conditions.
The acquisition is a strategic move by Vishay, a major player in the discrete semiconductors and passive electronic components market, to secure a steady supply of metalized film material. This material is essential for manufacturing high voltage high power film capacitors, which are increasingly in demand for smart grid infrastructure projects.
Joel Smejkal, President and CEO of Vishay, emphasized that Birkelbach has been a crucial supplier for Vishay for many years and that this acquisition will enable Vishay to provide better service and product reliability to their industrial grid customers. The company plans to vertically integrate Birkelbach into its Capacitor segment and invest in metalizing equipment to ensure continuous supply to Birkelbach's existing customer base.
Marc Zandman, Vishay's Executive Chairman, noted that the acquisition aligns with Vishay's history of vertical integration to secure critical materials and to capitalize on growth opportunities.
Vishay, listed on the NYSE as a Fortune 1,000 Company, serves a global customer base and is known for its extensive portfolio of discrete semiconductors and passive electronic components used in various sectors, including automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets.
The company's forward-looking statements regarding the acquisition's future performance and growth prospects are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected.
This acquisition announcement is based on a press release statement from Vishay Intertechnology, Inc.
In other recent news, Vishay Intertechnology has announced a major restructuring plan, including the closure of three manufacturing facilities and workforce reductions. The company reported steady Q2 2024 revenues of $741.2 million, maintaining a gross margin of 22.0%. Analyst firms Stifel and TD Cowen have maintained their ratings on Vishay's shares, with Stifel keeping a Buy rating and a price target of $25.00, while TD Cowen holds a rating but lowered the price target from $24.00 to $22.00.
The restructuring is part of Vishay's "Vishay 3.0" growth strategy, aimed at enhancing operational efficiency and driving long-term growth. The company is also planning capacity expansion investments of $2.6 billion from 2023 to 2028, aiming to increase MOSFET capacity by 12% in 2025 and semiconductor products by 5.5% in 2024.
Additionally, Vishay has expanded its IHPT series of haptic actuators, targeting various automotive and commercial applications. The company has also acquired Ametherm, expected to improve its position in the electric vehicle and battery management system markets. These are among the recent developments that reflect Vishay's ongoing transformation efforts.
InvestingPro Insights
Vishay Intertechnology's acquisition of Birkelbach Kondensatortechnik GmbH comes at a time when the company faces some financial headwinds, according to recent data from InvestingPro. The company's revenue growth has declined by 11.76% over the last twelve months as of Q2 2024, with a more pronounced quarterly revenue drop of 16.91% in Q2 2024. This context underscores the strategic importance of the acquisition in potentially bolstering Vishay's market position and supply chain resilience.
Despite these challenges, InvestingPro Tips highlight that Vishay has maintained dividend payments for 11 consecutive years, demonstrating a commitment to shareholder returns even in challenging times. This could be reassuring for investors concerned about the company's recent performance. Additionally, the company's liquid assets exceed short-term obligations, suggesting a solid financial foundation to support strategic moves like the Birkelbach acquisition.
The acquisition's $18.5 million price tag represents a small fraction of Vishay's market capitalization of $2.33 billion, indicating that while significant for its strategic value, the deal is unlikely to strain the company's finances. With a P/E ratio of 13.67, Vishay's stock appears reasonably valued, especially considering the potential growth opportunities this acquisition might unlock in the smart grid infrastructure market.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 5 more InvestingPro Tips available for Vishay Intertechnology, providing a deeper understanding of the company's financial health and market position.
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