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Schneider Electric / Square D News
| Schneider Electric Acquires MGE UPS Systems |
Rueil-Malmaison, France, December 22, 2003 – Pursuing its strategy of targeted acquisitions, Schneider Electric has decided to fully acquire MGE UPS Systems, in which it held a 32.3% interest at December 31, 2002. Description of the transaction Schneider Electric has signed two agreements under which it will increase its stake in two stages: - The aquisition of a 52.6% interest, corresponding to all of the stake held by Legal & General Ventures and ABN Amro and approximately half of the interest held by MGE UPS Systems’ management and employees, for EUR 298 million. - The acquisition in 2006 of the remaining 15.1% for a price based on MGE UPS Systems’ 2005 EBITA level. Maintaining management and employee share ownership will promote the achievement of ambitious growth objectives. The transaction should be completed in the first quarter of 2004, pending approval by anti-trust authorities, notably in the United States and Europe. Given the assumption of EUR 283 million in debt (as of September 30, 2003) and Schneider Electric’s existing interest in MGE UPS Systems, the total investment should amount to an enterprise value of around EUR 850 million. In accordance with Schneider Electric’s acquisition criteria and in light of expected synergies, the acquisition will be accretive as from the first year before amortization of goodwill and neutral in the second year after amortization of goodwill. MGE UPS Systems: an attractive partner for Schneider Electric MGE UPS Systems is a world leader in uninterrupted power supply systems, the core of the secured power market. Worth an estimated EUR 27 billion, this market is driven by the growing need for reliable, clean electricity and rising demand for controlling energy costs. Secured power represents a strategic growth avenue for Schneider Electric due to its long-term growth prospects (8% a year on average) and its potential in related services. With 2,900 employees and sales near to EUR 500 million, MGE UPS Systems is a world leader in high-availability power solutions. It offers a full lineup of products and services, as well as a global network of 37 subsidiaries and operations in more than 100 countries. MGE UPS Systems is also one of the most profitable companies in its industry, with an operating margin above 12%. Commenting on the acquisition, Schneider Electric Chairman and Chief Executive Officer Henri Lachmann declared: “This move gives us a new growth platform at a time when power quality is becoming a critical issue. Following on Digital Electronics in industrial automation, T.A.C. in building automation, and Clipsal in ultraterminal distribution, this transaction fits in perfectly with our external growth strategy. These targeted acquisitions, which together represent nearly EUR 1.3 billion in sales, extend and expand Schneider Electric’s portfolio of products and services.” About Schneider Electric Schneider Electric is the world’s power and control specialist. Through its world-class brands, Merlin Gerin, Square D and Telemecanique, Schneider Electric anticipates and satisfies its customers’ requirements in the residential, buildings, industry and energy and infrastructure markets. With 74,814 employees, Schneider Electric generated sales of EUR 9.1 billion in 2002 through 13,000 sales outlets in 130 countries. Schneider Electric Giving the best of the New Electric World To everyone, everywhere, at any time. For more information, please visit www.schneider-electric.com |