NEWARK, N.Y. - Ultralife Corporation (NASDAQ: ULBI) has entered into a definitive agreement to purchase all outstanding shares of Electrochem Solutions, Inc. from Integer Holdings Corporation (NYSE: NYSE:ITGR) for $50 million in cash, with an expected transaction completion by the end of October. The acquisition includes Electrochem's ISO certified technology and manufacturing facility.
Electrochem, based in Raynham, MA, brings over four decades of experience in battery technology, serving sectors such as energy, military, and various industrial markets globally. For the twelve-month period ending June 30, 2024, Electrochem reported revenues of $34 million. Ultralife anticipates that the acquisition will be accretive to its earnings per share (EPS) in 2025.
Mike Manna, President and CEO of Ultralife, stated that the acquisition aligns with the company's strategy to leverage its business model through scale and manufacturing cost efficiencies. He highlighted Electrochem's complementary product portfolio and blue-chip customer base, which has minimal overlap with Ultralife's existing customers. Manna emphasized the potential for revenue growth through cross-selling opportunities and expansion into new markets demanding high safety and quality standards.
Manna also noted that the acquisition is a strategic fit for Ultralife's growth and innovation-focused culture. He expressed confidence in the value addition from Electrochem's team and the leadership of Khristine Carroll, who will join Ultralife as Senior Vice President - General Manager of Electrochem post-acquisition.
Carroll remarked on Electrochem's reputation for reliable and high-quality battery solutions and expressed enthusiasm for the enhanced product offerings and customer support that the merger with Ultralife will bring. She anticipates continued growth and successful delivery of Electrochem's 2025 revenue and profitability plans as part of Ultralife.
Ultralife Corporation, headquartered in Newark, New York, provides power solutions, communications, and electronic systems to government, defense, and commercial customers globally. The company operates in North America, Europe, and Asia and is recognized for its engineering expertise and problem-solving capabilities.
This news is based on a press release statement from Ultralife Corporation. The company cautions investors about forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from the projections.
In other recent news, Integer Holdings Corporation reported impressive second-quarter sales of $436 million, a 9.0% year-over-year increase. The acquisitions of Pulse and InNeuroCo contributed $15.4 million to the sales figures, and the company's EBIT rose by 34% year-over-year, reaching $40.0 million. Integer Holdings' net income also saw a 30% increase, amounting to $31.2 million. Despite earnings per share (EPS) for the quarter coming in at $0.88, falling short of both Oppenheimer's and consensus estimates, the company reiterated its full-year 2024 revenue guidance, projecting between $1,735 million and $1,770 million.
Integer Holdings has adjusted its forecast for diluted GAAP EPS to a range of $3.26 to $3.67, slightly down from the previous projection. Oppenheimer maintained its Outperform rating on Integer Holdings, highlighting the company's diversified risk-reward profile, unique core competencies, and improving financial statement. The company also revealed a robust growth projection for 2024 during its second-quarter earnings call, expecting an 18% growth in adjusted operating income on a 10% increase in sales. Free cash flow is projected to be between $85 million and $105 million for 2024, while net total debt is expected to increase by $60 million to $80 million by the end of 2024. These recent developments indicate a strong financial performance and potential for growth in Integer Holdings.
InvestingPro Insights
As Integer Holdings Corporation (NYSE: ITGR) divests Electrochem Solutions to Ultralife Corporation, it's worth examining ITGR's financial position. According to InvestingPro data, ITGR boasts a market capitalization of $4.22 billion and has demonstrated strong revenue growth, with an 11.71% increase in the last twelve months as of Q2 2024. This growth trajectory aligns with the company's strategic decision to streamline its operations.
InvestingPro Tips highlight that ITGR is trading near its 52-week high, suggesting investor confidence in the company's direction post-divestiture. Additionally, the company's liquid assets exceed short-term obligations, indicating a solid financial foundation as it focuses on core operations.
It's noteworthy that ITGR has a P/E ratio of 40.17, which an InvestingPro Tip describes as "trading at a high earnings multiple." This valuation could reflect market expectations for future growth following the sale of Electrochem. Investors considering ITGR should be aware that while the company has been profitable over the last twelve months, it does not currently pay a dividend to shareholders.
For those seeking a deeper analysis, InvestingPro offers additional tips and insights that could be valuable in assessing ITGR's future prospects in light of this transaction.
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