Schneider to acquire BEI Technologies

Edited by the Engineeringtalk editorial team Jul 27, 2005

Schneider Electric and BEI Technologies have reached a definitive agreement for Schneider to acquire all the shares of BEI for $35 per share in cash.

Schneider Electric and BEI Technologies have reached a definitive agreement for Schneider to acquire all the shares of BEI for $35 per share in cash.

The transaction, which is recommended by the board of directors of BEI, values the company at approximately US $562 million including net financial debt of approximately US $29 million.

BEI Technologies is a leading specialist in customised sensors with annual sales of more than US $300 million.

This acquisition, which is subject to certain conditions, fits Schneider Electric's strategy of selective targeted acquisitions to build up attractive growth platforms for the group in markets adjacent to its core historical offerings.

Customised sensors represent a significant growth opportunity for Schneider Electric.

The targeted market has a sise of US $10 billion and is growing at 7 to 8% per annum driven by: heightened focus on security, guidance and control of applications in transportation, aero-defense and industry; increasing penetration of automation and embedded intelligence in applications with growing need for high precision sensors; and development of control and diagnostic functions by electronic measurement (microprocessor).

The acquisition of BEI Technologies will create a sizeable and valuable leading customised sensors platform with doubled sise and earnings growth prospects.

This platform, which already includes Crouzet Automation and Kavlico, will strongly benefit from their respective market positions and technologies.

It will provide the most comprehensive range of products based on cutting-edge technology, with leading market positions in inertial sensors (number one worldwide in quartz technology for gyros), position sensors and pressure sensors for the transportation, aero-defense and industry markets.

Henri Lachmann, Chairman and CEO of Schneider Electric, commented: "This acquisition of a leading customised sensors specialist with strong brand names and excellent reputation for innovation and performance is a breakthrough for our customised sensors platform".

"BEI brings us outstanding competencies and significant potential for cross-fertilisation with Crouzet and Kavlico".

"We are confident that our platform will now benefit from critical sise and have the ability to set the standards in the attractive customised sensors market".

Charles Crocker, Chairman and CEO of BEI Technologies commented: "We believe the combination of BEI and Schneider Electric will establish a strong platform that will create significant new opportunities to accelerate sales and marketing, technology, research and development, and expansion of sensors based products in the marketplace".

Under the terms of the proposed transaction, Schneider Electric, via a wholly owned acquisition subsidiary, will make a tender offer to acquire all of the issued and outstanding shares of BEI Technologies for a price of $35 per share in cash.

Following successful completion of the tender offer, any shares of BEI Technologies that have not been tendered will be acquired in a cash merger at the same price.

It is further proposed that, after acquiring BEI Technologies shares pursuant to the tender offer, Schneider Electric's acquisition subsidiary merge with and into BEI Technologies.

The Boards of Directors of each of Schneider Electric and BEI Technologies have authorised and approved the proposed transaction.

The closing of the transaction is expected by the 4th quarter of 2005.