XTX.TO/xarxf.pk I am not sure if anybody else on the board folows this stock but they announced they are in talks to be acquired. GE, Siemens, ABB are possible suitors. Stock is now trading in the 12's. Analysts speculate a bid in the 14 to 15 range. I own shares of XTX.TO Do your own DD.
With alternative energy products revitalizing its balance sheet after years of disappointing results, Xantrex Technology Inc. said yesterday it is in takeover talks with an unnamed suitor.
The Vancouver-based company manufactures inverters that convert energy gathered by solar panels and wind turbines into a usable form. It also makes battery chargers and power packs, which are used by campers and boaters.
"They've had issues in the past and disappointed the Street with their earnings," said Research Capital Corp. analyst Jonathan Hykawy.
"They've had a rough ride, but at this point this is the strongest product portfolio they have ever had. Now isn't a bad time to consider a sale."
The company released a statement yesterday confirming negotiations were under way, but warned that a deal was not guaranteed. Still, the stock closed 19 per cent higher as analysts suggested a likely takeover price of $14 to $15.
"My feeling is they are quite advanced in their negotiations," said Clarus Securities analyst Carolina Vargas. "I talked to the company, and they wouldn't provide timelines. But I would think a deal will be announced sooner than later, hence the disclosure."
Xantrex posted a $541,000 profit in its first quarter, and will release its second-quarter results Tuesday. Revenue from its renewable power division, which makes inverters for the solar and wind markets, increased by 58 per cent. It is experiencing particularly strong growth in its solar business, where revenue has increased 200 per cent in the last year and it has a 30-per-cent share of the global market.
Haywood Securities analyst Ralph Garcea said the bulk of the company's new business in the last year - including a $5-million deal announced last week with SunEdison LLC - has been tied to solar energy projects.
One of its partners may have decided to absorb the company, he said.
"What's happening in wind and solar is that the large companies are making acquisitions to vertically integrate their operations," Mr. Garcea said.
"You could see someone wanting to add power inverters to their strategy. Large wind companies would definitely be interested, as well as five or six other big companies."
Analysts named General Electric Co., ABB Asea Brown Boveri Ltd., Siemens AG and Schneider SA as possible suitors, as well as SMA Solar Technology AG - one of Xantrex's chief competitors, which raised $570-million in June in Germany's largest share offering of the year. SMA chief executive officer Güenther Cramer has promised to increase capacity at a "dynamic rate," putting pressure on its smaller rivals.
"If your competitor is looking to consolidate the industry, there are a couple of ways you can look at it," said Cormack Securities analyst MacMurray Whale.
"You can raise some more capital, or you can sell to someone now. It's only recently with solar and wind taking off that the company's financial house is in order. Maybe this is the time to sell, when the market is hot."
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