Boosting its presence in the critical power market, Schneider Electric SA, Paris, has agreed to buy American Power Conversion Corp., a leader in power availability solutions, for approximately $6.1 billion.
Schneider Electric plans to combine APC with its MGE UPS Systems. According to its 2005 annual report, Schneider Electric ranks itself second worldwide in the UPS market. The company said its 2005 acquisition of Power Measurement Inc., Victoria, Canada, strengthened its position in this market.
APC is a provider of AC- and DC-based back-up power products and services, which include surge suppressors, uninterruptible power supplies (UPS), power conditioning equipment, power management software and DC power systems. The company, which has 7,600 employees, had approximately $2 billion in sales in 2005. Small and medium uninterruptible power supply (UPS) systems account for about 74 percent of APC’s sales, according to Schneider. The company also has one of the fastest growth rates in the industry in large UPS systems (more than 30 percent per year). This strong growth in large UPS has required significant investments, which have negatively impacted APC’s operating margin (9.4 percent in 2005). Schneider Electric said it is confident it can rapidly improve APC’s profitability going forward through MGE UPS Systems.
The deal is expected to close in the first quarter of 2007, pending approval of APC shareholders. Approval from Schneider Electric’s shareholders isn’t required. The APC’s shareholders are expected to vote on the transaction in early 2007.
With 92,000 employees and operations in 130 countries, Schneider Electric generated 2005 sales of about $14.9 billion in 2005.