Phinia completes strategic acquisition of SEM, updates sales outlook for 2025

Phinia has completed its acquisition of Swedish Electromagnet Invest for approximately $47 million. The company has also reported Q2 sales of $890 million, up 2.5% YoY, and adjusted EPS of $1.27 per share. Additionally, Phinia has refined its 2025 earnings guidance, updating its net sales outlook to $3.33 billion to $3.43 billion.

Phinia Inc. (NYSE: PHIN) has completed its acquisition of Swedish Electromagnet Invest AB (SEM) for approximately $47 million [1]. The transaction, announced on June 10, 2025, is part of Phinia's broader strategy to lead in carbon-neutral mobility. The acquisition aligns with Phinia's vision to redefine its role as a full-system provider in the decarbonization of commercial and industrial transportation [1].

The acquisition brings with it SEM's century-old expertise in hydrogen and natural gas ignition systems, including its innovative FlexiSpark® technology, which addresses critical challenges in hydrogen combustion engines [1]. This technology complements Phinia's existing strengths in fuel injection, engine management systems, and software calibration, enabling the company to offer end-to-end solutions for optimizing combustion efficiency in hydrogen and natural gas engines [1].

In its Q2 2025 earnings report, Phinia reported sales of $890 million, a 2.5% year-over-year increase, and adjusted EPS of $1.27 per share [2]. The company also refined its 2025 earnings guidance, updating its net sales outlook to a range of $3.33 billion to $3.43 billion [2]. The acquisition is projected to add $50 million in annual revenue and $10 million in adjusted EBITDA to Phinia's financials [1].

Phinia's competitive positioning post-acquisition is bolstered by its expanded capabilities in hydrogen internal combustion engines (H2ICE). The company's joint development of a 2.2L H2ICE with South Korean OEM KG Mobility (KGM) exemplifies its ability to deliver zero-carbon alternatives to diesel [1]. This system, paired with SEM's FlexiSpark® technology, offers a scalable solution for industries bound by weight and range constraints.

The acquisition underscores Phinia's commitment to ESG-driven growth, positioning it to access green financing and attract socially responsible investors. However, the company must navigate supply chain bottlenecks, regulatory uncertainties in hydrogen infrastructure, and competition from battery-electric vehicle (BEV) manufacturers. Phinia's robust financial position, with $373 million in cash reserves and $499 million in credit capacity, provides the flexibility to weather these challenges [1].

For investors, Phinia's acquisition of SEM represents a strategic bet on the long-term tailwinds of decarbonization. The company's forward EBITDA multiple of 10.5x is undervalued compared to peers like Cummins (13.2x) and BorgWarner (12.8x), offering a compelling entry point for those aligned with ESG themes [1].

References:
[1] https://www.ainvest.com/news/phinia-strategic-acquisition-sem-paving-carbon-neutral-mobility-2508/
[2] https://www.marketscreener.com/news/phinia-completes-strategic-acquisition-of-sem-ce7c5fd2d18df726