It appears the sale of Pelco to Schneider Electric/TAC was completed yesterday. Already rumors are a buzz about what's taking place next (as this industry is so famous for its rumor mill), so please keep an eye on this site or sign up to our RSS feeds, as we will have more news (real news, no rumors) once we know something and can share it.
Here is an article from Financial Mirror posted early this morning:
Schneider Electric takes over Pelco Security Systems for $ 1,54 bln 17/10/2007
Schneider Electric has completed the acquisition of Pelco, a worldwide leader in the design, development and manufacturing of video security systems.
With this acquisition, Schneider Electric significantly reinforces the offering of its Building Automation business, which encompasses power and HVAC control, electronic security and fire safety, and increases its ability to provide integrated solutions.
Schneider Electric has acquired all shares of Pelco for a total consideration of $1,540 million, including an enterprise value on a cash-free debt-free basis of $1,220 million and the net present value of a tax benefit resulting from the step-up of Pelco's assets of $320 million. Pelco will be consolidated in Schneider Electric's accounts as of October 16. Pelco is a world leader in the design, development and manufacture of video security systems and supporting equipment. The company is based in Clovis, US-California and has 2,200 employees worldwide. Its keyproducts include Domes, IP Systems, Digital Video Recorders. It recorded sales of $506 million in 2006, ofwhich 36% outside the US.
Schneider Electric is the world's power and control specialist. It anticipates and satisfies its customers'requirements in the residential, building, industry and energy and infrastructure markets. With 112,000employees and operations in 190 countries, Schneider Electric generated sales of €13.7 billion in 2006 through more than 15,000 distributor outlets.
If you've read The World is Flat chances are you're more open to globalization and not particulary too worried about where a corporate office's geographical location might be. Part of Pelco's brand is "Made in America." For instance, a US flag adorns Pelco clothing; they have a 9-11 museum; are the single largest donator to Toys-for-Tots, and the US Flag flown in Clovis, CA is so big they needed special permission from the FAA. Ironic they are soon to be officially owned by a French based company.
Well, outside of fashion and perfume there are a number of other American used products owned by the French. The FresnoBee reported the following brands or companies: Mack Trucks was purchased by Renault in 1990 after being founded in Brooklyn. If you consume Dannon yogurt - that's French. Smoke, shave or write? You might be using a lighter, razor or pen from Bic. Michelin tires are French. Finally, the United States Marine Corp is fed by the US subsidiary of Sodexho Alliance......a $16.9 bilion dollar French company.
Scheider Electric released some interesting financials of the deal and about Pelco. As Pelco being privately held, this kind of information was always held to rumor or speculation. It's out now. Welcome to the world of accountability and always increasing shareholder value. I've cut and pasted some highlights for your reference....
Pelco is the best possible fit for Schneider Electric to expand into building automation and security.
Leader in the fast growing video security industry
Highest brand recognition in the industry
Above industry growth with a compound annual growth rate (CAGR) of 21% over the period 1997-2006.
Sales of $506 million in 2006 (36% of that was outside the US)
Broadest product line with full end-to-end solutions
Significant R&D investments representing 7.5% of sales
Premier Customer base from fanatical customer service
Schneider Electric reports sales of 13.7 billion Euros in 2006. At close they will pay a total of $1.54 billion for Pelco. Pelco will report into TAC, Schneider Electric's Building Automation Unit, and will take leadership of its present Fire & Security Product Division. Based on 2006 sales of $506 million, Pelco had an EBITDA of $46M and an EBITA of $30M.
We have exciting news to share with you......today Pelco officially announced their plans to be acquired by Schneider Electric of France who owns TAC domestically and under this corporate umbrella the Andover brand, Integral Technologies, and a host of others. While the transaction is expected to close by October 2007, we feel this will be a very positive relationship for both companies moving forward in a rapidly changing and growing industry.
Pelco told us in a conference call this morning they will remain committed to their current business model without any disruption to Pelco’s service or any adverse changes.David McDonald, Pelco President and CEO, has stated: “Schneider Electric is an ideal partner for Pelco. Both companies share the same commitment to people, innovation and customer service that will make our combined enterprise an even stronger, more competitive player in the industry. We look forward to the unique benefits this partnership will bring to our customers and employees.It’s totally business as usual.” At KPA we feel this relationship will be a great benefit to new technologies and Pelco’s R&D efforts.
Like you, we have been hearing the myriad rumors on the street for several months without any official confirmation from Pelco until today.Non-disclosure and other legal requirements prohibited Pelco management from making any formal comments to us or their customer base.During this morning’s conference call Pelco has made the commitment to over communicate during this transition and as soon as we have more news we will share it with you.
KPA’s goal is to be as transparent as possible.In this effort we have set up a blog where latest news will be posted and where we encourage you to post your own comments or opinions and read postings from your peers.We want to hear what you have to say!The address for this blog is: www.kpa.typepad.com.