Yageo Acquires Pulse Electronics for $740M Which Earlier Acquired Egston Holdings

Taiwan’s Yageo Corp has agreed to acquire Pulse Electronics of San Diego for $740 million in cash, in turn absorbing Eggston Holdings of Austrria which was acquired by Pulse only months earlier. The string of deals brings together three top manufacturers of magnetic and electronic components into a new global powerhouse.

Yageo and Pulse announced their deal in late May. They said it is expected to help Yageo gain greater penetration in the automotive electronics market while furthering its geographic penetration. Yageo makes electronic and wireless components including soft ferrite products for consumer, automotive and industrial markets including resistors, capacitors and wireless components. The acquired operations include 16 research, development and design centers located in Asia, the U.S. and Europe, also eight sales offices worldwide, and eight production plants in China, the U.S., Czech Republic and India with a total of 6,000 employees including 270 R&D engineers and 200 salespersons, said Yageo.

Earlier, Pulse acquired Austrian-based Egston Holdings, a leading European magnetics and cable assembly provider to automotive, industrial and power markets with annual revenues of $87 million and 1,400 employees globally. That deal came on the heels of robust business performance for Pulse in the past year.

Egston, with 2017 revenues of approximately $87 million, six facilities in Austria, Czech, China and India, and 1,400 employees globally, complements several growing segments of Pulse, including electrification of mobility, autonomous driving, Industry 4.0, IoT and smart grid applications, said Pulse at the time. Egstons activities in inductive components and cable systems were seen as enabling Pulse to better serve the communications, power magnetics and wireless antenna markets, as well as in the smart grid, industry and specialty vehicle markets, said Pulse officials.

“The acquisition of Egston, a leader in inductive components and cable systems for the electronics, power distribution, automotive and construction vehicle markets, expands our high technology product offering in the growth markets we already serve,” said Mark Twaalfhoven, CEO, when the deal was completed in January.

Mark Twaalfhoven_Egstron

Egston was to continue operating as an independent business unit of Pulse, known as Egston a Pulse Electronics Company. Egston CEO Frank Wolfinger was to continue to lead the unit as general manager. Pulse pledged to maintain the Egston brand and continue manufacturing its entire product line in order to continue to serve existing customers.

“We are very excited to join the Pulse Electronics family and look forward to growing our global footprint, which will allow us to better serve our loyal customers while leveraging new market channels and complementary products offerings,” said Wolfinger. “We are confident that this transaction will act as a springboard to continue the strong growth of Egston.”

Walter Wunderer, owner of Egston Group, said that he was happy to see the acquisition. “Pulse has the financial means to further support the growth of Egston and its integration into Pulse will help to further enhance its development.”

Meanwhile, Pulse has reported robust business growth with its 2017 results demonstrating a turnaround year. Revenues increased 10.1% to $315 million while net income increased to $34.6 million compared to a loss of $13.9 million for 2016.

“2017 was a growth year for Pulse, demonstrated by our double digit growth from 2016, our positive net income and cash flow, and our substantial growth in organic revenue,” said Twaalfhoven. “Our focus on EV, autonomous vehicles, and smart grids has increased shipments of our products and resulted in several key customer wins including a new contract to provide products to a leading EV company in the U.S. We’re confident that our focused investments in R&D and the successful design-in of several new projects will result in sustained growth over the next several years.”

Pulse has been a portfolio company of various investment funds managed by Oaktree Capital Management L.P., a global investment management firm specializing in alternative investments, with $100 billion in assets under management.