Avantha Group’s engineering firm Crompton Greaves Ltd has acquired Sweden-based Emotron Group for an enterprise value of € 57.8 million ($82.2 million or Rs 370.2 crore).
Emotron is a power electronics and engineering company, engaged in manufacturing of variable speed drives, soft starters, shaft power monitors and customised products, and providing project solutions. It has a strong presence in the Western European market, especially in Germany and Benelux region.
For the year ended December 31, 2010, it had revenues of €37.3 million ($ 53 million or Rs 238.8 crore), with EBITDA of €4.4 million or $6.25 million, translating into a deal that values the firm at 13 times its EBITDA.
This is the eighth 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).
“With this acquisition, the company has achieved its ambition of becoming a global player capable of providing comprehensive solutions in its industrial systems business,” the firm said on Thursday.
The deal fills the gap in automation solutions space for Crompton Greaves’ industrial business.
The global market for variable frequency drives is projected to rise from $10 billion in 2010 to $16 billion by 2014. The market for variable frequency drives in India is pegged at $375 million and is growing rapidly due to focus on green energy.
Crompton Greaves scrip rose 0.65 per cent to close at Rs 238.45 at BSE on Thursday, valuing the firm at Rs 15,296 crore. The announcement of the deal came after trading stopped for the day.
This deal marks 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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