Schneider Electric launches an "historic" operation in the United States. The world leader in electrical distribution and automation yesterday announced a bid of $ 6.1 billion on American Power Conversion (APC), the world leader in secure energy. Net cash flow, the transaction amounted to 5.5 billion. This market, which aims to ensure customers a stable for interruptions due for example electricity network failures or lightning is experiencing strong growth while traffic and data storage capabilities to explode.
"It is a major Schneider movement", welcomed its President Jean - Pascal Tricoire, observing that the last operation of this magnitude was in 1991, the Square d, the leading national electrical distribution. Irony of fate: the title Schneider unscrewed yesterday by 7 during the meeting, marking its highest drop since October 2001, to which it was vetoed by the European Commission on its proposed merger with Legrand.
"This is a very expensive acquisition", said one analyst, who observes that Schneider pays 24 times the earnings before interest and taxes (Ebit) of APC, against 14 times average for its recent acquisitions, "what was already a premium to the market". According to many at the time, terms of share assumptions ambitious la études en le groupe la studies the Group part of margins. Analysts also fear that integration goes wrong.
In the viewfinder
But while the Group raises the covetous of financial investors, a source close to Schneider refused to interpret the operation as a defensive measure. Passionate, Jean-Pascal Tricoire said that "APC is perfect for Schneider complementarity" both in geographical terms products, stating that the US group was long in the viewfinder of Schneider. Indeed, the French industrial returned to the trade inverters, the relay equipment breakdown of current, with the purchase in 2003 of French MGE UPS, four number world, which it was separated in the 1990s.
It is therefore as much a strategic movement as opportunistic because the US group of 7.600 employees a crisis which resulted in mid-August the sudden departure of his former boss. Schneider then approached the group, which resulted in auctions closed last Saturday.
On the merits, APC suffers from too rapid growth due to its expansion beating drum in large systems, which require both powerful ups and large resources of services. However, the company was originally specialized on small systems, in which she still performs 74 of its sales. The adventure ended in losses on the niche of large systems and a recovery program for 650 deletions of posts. It is on this restructuring plan that Schneider based his goal of annual synergies of $ 220 million for 2011, from here to 27 of sales and 73 of the costs. In the end, he table on a $ 3.3 billion value creation for its shareholders.
Technically, Schneider will offer to the shareholders of APC 31 dollars per share, a premium of 30 October 27 and a total of $ 6.1 billion (but only 5.5 billion if taking into account the net cash of the American Group). The operation will be funded by debt to $ 4.5 billion euros and through a capital increase of 1.2 billion. The S & P financial rating agency has developed "under surveillance with negative implications" debt notes (A) long-term and short-term (A1) of Schneider Electric.
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