Avantha Group’s engineering firm Crompton Greaves Ltd has struck its second deal in about a week by acquiring US-based company QEI Inc. for an enterprise value of $30 million or Rs 135 crore.
QEI is into SCADA and automation systems, and products for the management of electric transmission and distribution networks.
With this acquisition, Crompton Greaves has fortified its position in the SCADA and substation automation domain, especially in the USA. Some areas of complementarities include data acquisition, renewable SCADA, transit and substation automation.
The deal involves upfront payment of $24 million with the balance $6 million to be payable under an earn-out model.
Crompton Greaves scrip was down marginally trading at Rs 257 at NSE on Friday noon. The stock has risen around 8 per cent since the last transaction.
For the year ended July, 2010, QEI had revenues of $12.4 million and EBITDA of $2.35 million. Therefore, the deal valued the firm around 13 times EBITDA.
This was also the valuation multiple at which Crompton Greaves struck its previous deal last week. The company had acquired Sweden-based Emotron Group for an enterprise value of €57.8 million ($82.2 million or Rs 370.2 crore). (See our ).
QEI is the ninth acquisition by Crompton Greaves in the past six years, starting with Pauwels (2005), Ganz (2006), Microsol (2007), Sonomatra (2008), MSE Power System (2008), Power Technology Solutions (2010) and three units of Nelco (2010).
This deal may mark the final transaction for old-timer SM Trehan, managing director of Crompton Greaves, under whose leadership the firm made a turnaround almost a decade back and who led the firm through the past six years of global acquisitions.
Trehan, who is retiring soon, passes on the baton to Laurent Demortier, former president of the power automation and control business unit of Alstom Power, who will take over from June 1. Before joining Alstom, Demortier worked with Honeywell Corp and Safran.
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