DPW Holdings (DPW) Stock Rockets On Relec Electronics Acquisition

DPW Holdings DPW Stock News

DPW Holdings Inc (NYSEAMERICAN: DPW) is screaming for the top in the market this morning, and for good reason. The company announced that it has agreed to acquire Relec Electronics. Here’s what’s going on:

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DPW Stock Is Climbing On Relec Electronics Acquisition

In the press release, DPW Holdings said that its global defense business, Gresham Worldwide, has agreed to acquire Relec Electronics. Relec is an England-based technology company.

In the press release, DPW said that the transaction is structured as a stock purchase agreement. According to the agreement, Gresham Worldwide will pay about $3.93 million in cash at closing. The company has also agreed to pay future cash payments of up to $655,000 based on Relec’s future financial performance.

In the release, the company said that it expects the transaction to close on or about November 20, 2020.

Relec and Gresham Worldwide are a match made in heaven. This is especially the case when you considering that Relec is a major supplier of power conversion and display technologyproducts in the industrial, rail transportation, and emerging electronics markets.

Ultimately, DPW Holdings said that the acquisition of Relec will enhance Gresham Worldwide’s presence in the U.K. and Europe. Moreover, the company said that the acquisition significantly broadens the Gresham Worldwide product portfolio.

The company also explained that the acquisition is expected to be accretive immediately, bringing $1.2 million of net tangible assets to the table. Moreover, Relec generates about $7 million of revenue per year with adjusted pretax income of about $1.1 million for the most recent fiscal year.

In a statement, Jonathan Read, Gresham Worldwide CEO, had the following to offer:

This combination provides a great opportunity for Relec and Gresham Worldwide to benefit from the strengths of each organization. We are thrilled that Peter Lappin and the Relec team will bring to Gresham Worldwide the technical expertise, customer focus, quality products and commitment to outstanding service that enabled them build such a successful business.

The above statement was followed up by Karen Jay, Managing Director of Gresham Power Electronics with the following:

We spearheaded the Relec acquisition with a view to gaining access to additional resources and products to increase the range of offerings and service levels that Gresham Worldwide could provide to its customers. This deal significantly increases our footprint in the U.K. and Europe and gives both companies more scale, technical capabilities and offerings to move to the next level in defense, marine, rail, medical and industrial vertical markets in the UK and Europe.

Finally, Milton “Todd” Ault, III, CEO and Chairman at DPW, had the following to offer:

This acquisition aligns perfectly with DPW’s stated goals for strategic growth of the Gresham Worldwide business. The Relec acquisition will be immediately accretive with clear synergies and a strong management team. We look forward capitalizing on these synergies and growing our global defense and technology business.

The Bottom Line

The bottom line here is simple. DPW Holdings made a huge announcement this morning that will ultimately expand its subsidiary’s presence in the U.K. and Europe, driving revenue and exciting investors. The fact that the acquisition is expected to be accretive immediately is exciting news. This, combined with the expanding product offering and likely growth in revenue that’s ahead, makes DPW stock one that’s hard to ignore.

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