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XP Powers up

XP Power's acquisition of EMCO adds a suite of high-margin products focused on a new, growing market
November 26, 2015

XP Power (XPP) has bought EMCO High Voltage in a $12m (£7.8m) deal that offers high-margin exposure to a sector that management said boasts "robust demand fundamentals".

IC TIP: Buy at 1446p

EMCO, which supplies the industrial and medical sectors with standard, modified and custom high-voltage products, provides the power converter specialist's existing customers with new technologies. It's also expected to attract new clients and be earnings-enhancing in the first full year of ownership.

Brokerage Investec Securities reacted to the news by adding £5m to its revenue forecasts for the year to December 2016. This prompted it to upgrade adjusted pre-tax profit expectations by 1.4 per cent to £27.5m, giving adjusted EPS of 107.8p.