Schneider Electric acquires SCADAgroup / Serck Controls for $A200m, 11*EBIT

15thApr 2010.  Schneider Electric announced today that it has signed an agreement to acquire Hunter Valley based technology firm SCADAgroup, an Australian-based leading provider of telemetry products and solutions for the water and waste-water, oil & gas and electric power end-market segments. The purchase price of the transaction, expressed as an enterprise value, is AU$200 million and 11 times forecast FY10 EBITA.

Telemetry is a key technology that allows the remote measurement, monitoring, control and data transfer of infrastructures scattered over a wide area or that are hard to access. SCADAgroup has operations throughout North America, the UK and Australia and employs over 500 staff. It is expected to generate revenues in excess of AU$110 million for the current fiscal year ending in June 2010.

SCADAgroup Pty Ltd is the holding company of a group of prominent international companies and their respective brands in the telemetry and process control industry. The group’s businesses span the globe with more than 500 staff and annual revenues over $140M.

SCADA Group was formed around Serck Controls, with management being assisted by private equity group Advent Management. Serck was formed after a management buyout of Hunter Water Tech from the Hunter Valley Water Authority in 1997. Advent acquired its interest in 2006 in a secondary management buyout transaction from the original private equity backers of Hunter Water Tech, Catalyst. In the 2006 transaction, Advent became a 70% shareholder in Serck Group Holdings which renamed to SCADAgroup and undertook further acquisitions.

Two of Advent’s funds invested approximately AUD$18.5m into SCADAGroup. Advent IV fund invested in March 2006 to fund a secondary buyout of the business and Advent V fund invested in June 2007 to fund an acquisition. Advent IV will make a return of 7 times its investment in SCADAgroup and Advent V will make 3 times. The IRRs that the two funds will generate on their respective investments in SCADAGroup will be 60% and 44%.

Robert Radcliffe‐Smith of Advent said “the 35 members of SCADAgroup’s management team on the share register are to be congratulated for their efforts in growing SCADAgroup’s earnings threefold since we invested. The Group Managing Director who founded the business in 1994, Paul Chisholm, and Finance Director, Neil Howland, deserve our special thanks for driving SCADAgroup’s significant global organic and acquisitive expansion across many time zones, over many years”.

Companies held by SCADAgroup include:
– Serck Controls Pty Ltd, a provider of process control and telemetry solutions to a broad range of industries and applications.
– Trio Datacom Pty Ltd, a manufacturer of data radio communications equipment.
– Control Microsystems Inc, a supplier of telemetry and control technology used for monitoring and control applications in oil/gas, power and water applications.
– Adaptive Instruments Corp., a supplier of advanced process control instruments.

Through this acquisition, Schneider Electric further reinforces its presence in the water, waste-water, and oil and gas segments. With SCADAgroup, it acquires technologies and product offers to be pushed through its channels, and execution and service capabilities that are complementary to its own in these segments.
Water, waste-water, and oil and gas are among the key market segments targeted by Schneider Electric and for which best levels of energy efficiency are achieved with integrated solutions combining industry automation and power.

This acquisition should be accretive on earnings per share from year 1 and meets Schneider Electric’s Return on Capital Employed criteria.

“Schneider Electric has acquired a global telemetry platform to address the needs of the attractive water, waste-water and oil and gas industries for which remote monitoring and control are critical to their large and dispersed sites,” said Scott Wooldridge, Vice-President, Schneider Electric Australia Industry Business.

“The combination of technologies, channels, customer knowledge and complementary execution capabilities will put us in an excellent position to capture new opportunities in these fast growing markets.”

The closing of the transaction, subject to regulatory approvals, is expected to occur soon.

Posted in M&A - Austr - S/W & Services, M&A - UK & Europe, M&A - US - H/w and S/ware and tagged , , , , .