WHAT IS IT? XP Power is a developer and manufacturer of power supply and converters for the electronics industry.
The small-cap firm has design hubs in Asia, Europe and North America and has revenues in excess of £166million.
WHAT’S THE LATEST? This week it bought Glassman for £31.8million, a New Jersey-based maker of high voltage power conversion products for the industrial and tech sectors.
Glassman reported sales of £12.4million in the year to December 31 and banked a profit of £2million.
XP Power expects the deal to give it an earnings boost when it reports its next full-year results.
WHO BACKS IT? Standard Life Investments, JP Morgan Asset Management and Legal & General Investment Management are all among its largest shareholders.
WHY SHOULD YOU INVEST? Analysts believe the business can increase its sales from £166.8million in 2017 to as much as £225.8million in 2020, especially after buying Glassman.
They also believe profits can rise from £36.1million to £48million over the same period.
Andrew Shepherd-Brown, an analyst at broker Peel Hunt, believes the two firms will fit together well.
He said: ‘Another attractive acquisition gives new revenue opportunities at a good price.
‘XP Power has made no secret of wanting to increase its presence in the higher power sector, but this deal looks particularly good.’
AND WHY YOU SHOULDN’T Making a success of an acquisition is never a sure thing. There have been many cases where new purchases have become a drain on the parent company.