Bel Announces Agreement to Purchase CUI Power Assets
Bel Fuse Inc. today announced that the Company has entered into an asset purchase agreement with CUI Global Inc., in which CUI will sell the majority of its Power business to Bel for $32.0 million, plus the assumption of certain liabilities and subject to closing working capital adjustments.
Based in Tualatin, Oregon, the CUI Power Business, a division of CUI Global Inc., had TTM sales of approximately $37 million with products and distribution that offer strong opportunities for growth. The CUI Power Business is a division within CUI Global's Power and Electromechanical (P&EM) segment.
Excluded from the Agreement is CUI Global's approximate 20% equity interest in Virtual Power Systems (VPS) related to the Intelligent Control of Energy® (ICE) product line for data centers based on VPS' proprietary Software Defined Power® (SDP) infrastructure.
Jim O'Neil, CEO of CUI Global, stated, "This transaction unlocks the substantial value in our P&EM segment and is an important step in our transformation into a diversified energy services platform that is grounded in our existing product portfolio and gas infrastructure capabilities. With this divestiture behind us, we move forward with an aggressive and disciplined acquisition strategy to tap into secular demand trends in the electric power, oil and gas, and telecommunication infrastructure industries for long-term shareholder value creation."
Daniel Bernstein, CEO of Bel, said, "The CUI Power Business' extensive product portfolio and distribution channel fits squarely within our growth strategy. Their product portfolio will round out Bel's current Power Products offering, allowing us to better address all our customer power needs. In addition, we look forward to utilizing CUI's success with the electronic catalog distributors throughout the Bel\Cinch product groups and capitalizing on CUI’s enviable strong relationship with these distributors. Electronic Catalog Distributors are playing a vital role in demand creation, and over the past four years this segment has been our fastest growing business.
“The combination of Bel and the CUI Power Business will substantially strengthen our Power Group and unite complementary capabilities, sales channels and customer relationships,” concluded Bernstein.
The all-cash transaction is expected to close in the fourth quarter of 2019, and will be funded with available cash on hand, some or all of which may be sourced from our revolving credit facility.