Power switching components designer XP Power (XPP) could be close to making a significant acquisition.

The company recently extended its lending facilities and any deal could add depth to its product range and possibly broaden its end markets.

Likely targets would be in power converter technologies, building on its existing expertise in complex high power and voltage products.

XP has clawed its way up the value chain over the years by developing its own in-house intellectual property (IP). This is complex, science-based kit designed for when off-the-shelf solutions can’t do the job.

The Singapore-based business has historically concentrated on internal research and development to generate long-term growth opportunities, although it has been happy to buy in technology and skills when the opportunity arises.

Last year the company returned to the acquisition trail nearly two years after its last foray into M&A. The $23m purchase of US-based radio frequency power supplies business Comdel built on its 2015, $12m purchase of Emco. It brought higher voltage products into the XP fold.

XP reported net debt of £9m as of its 31 December year end and the company has recently renegotiated an increase in borrowing facilities, from £50m to £125m.

XP Power is one of Shares’ running Great Ideas, flagged at £24.11 in July 2017. The stock is now changing hands at £35.

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