Zinger Key Points
- nVent Electric expects Electrical Products deal to be accretive to EPS in the first year.
- The transaction, closing in H1 2025, is valued at 12.5x projected trailing EBITDA, funded using available cash on hand.
- Get 5 stock picks identified before their biggest breakouts, identified by the same system that spotted Insmed, Sprouts, and Uber before their 20%+ gains.
nVent Electric plc NVT shares are trading lower premarket on Monday. The company disclosed a deal to acquire the enclosures, switchgear, and bus systems businesses (Electrical Products Group) of Avail Infrastructure Solutions for $975 million.
The Electrical Products Group business is a North American provider of infrastructure solutions with approximately 1,100 employees and nine manufacturing locations in the U.S. Electrical Products Group estimates revenues of approximately $375 million in the 12 months ending February 28, 2025, and has a strong backlog.
The company expects the acquisition to be accretive to adjusted earnings per share in the first year after the transaction’s completion.
The enterprise value multiple is approximately 12.5 times the projected trailing twelve-month EBITDA of the Electrical Products Group.
The transaction is anticipated to close in the first half of 2025, subject to customary closing conditions.
nVent plans to fund the acquisition with available cash on hand. As of December 31, cash and cash equivalents stood at $131.2 million.
nVent Chair and CEO Beth Wozniak said, “The demand for control buildings, switchgear and bus systems is expected to increase with the modernization of aging electrical infrastructure, expanding electrical capacity to meet power demand and the growth of data centers.”
”The Electrical Products Group has long-standing customer relationships with power utilities, data centers, OEMs and EPCs and a significant installed base across the United States. This acquisition builds on the platform we acquired with the Trachte acquisition and expands our offering and capabilities.”
Investors can gain exposure to the stock via First Trust Exchange-Traded Fund VIII First Trust Active Global Quality Income ETF AGQI and Schwab Strategic Trust Schwab Ariel ESG ETF SAEF.
Price Action: NVT shares are down 2.81% at $53.52 premarket at the last check Monday.
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