Japanese conglomerate Hitachi Ltd has acquired Gandhinagar-based Hi-Rel Electronics Pvt Ltd, a power electronics company backed by the private equity firm Helix Investments Advisors, for an undisclosed sum. Hi-Rel will now be renamed Hitachi Hi-Rel Power Electronics Pvt Ltd.
In June this year, VCCircle reported that the two firms were in talks for a business alliance that could include equity investment. Their partnership itself is older (since June 2009) and they have been working together to expand sales of medium-voltage inverter drive systems in the country. Last year, Helix invested $11 million (Rs 50 crore) for a majority stake in Hi-Rel.
The acquisition strengthens Hitachi’s power electronics business in India by expanding its product offerings. Hi-Rel’s technologies, existing production capabilities and local sales and service network will help Hitachi to hit the ground running.
Next, it plans to set up a new manufacturing facility at Sanand-II Gujarat Industrial Development Corporation (GIDC) Estate, located near Ahmedabad. This unit will manufacture medium-voltage inverters and is expected to be ready by the end of 2012.
For the year ended March 2011, Hi-Rel registered a gross sale of Rs 111.5 crore. The company holds majority of the industrial UPS market share and offers resilient power systems for power plants, oil refineries, steel and fertiliser plants across India. It manufactures products such as low-voltage AC drives, digital UPS (uninterruptible power supply), the iTrac series of inverters for railway coaches, IGBT-based battery charging systems and solar power devices. Hi-Rel has also built energy and space-efficient UMPS (uninterrupted motive power supply) for industrial use.
Hi-Rel has nine offices across the country and is headquartered at Gandhinagar, Gujarat. Its key clients include ONGC, CESC, Hindustan Zinc, Tata Steel, JSW Steel and Reliance Petroleum, as well as state electricity boards.
Hitachi offers products and services across various domains – from home appliances and consumer electronics to travel, information security, software & solutions, storage, telecommunication network systems, biotechnology, healthcare and logistics. This year, it is focusing on the social innovation business, which includes information & telecommunication systems, power systems, environmental, industrial & transportation systems, and social & urban systems, as well as supporting materials and key devices for these sectors.
This acquisition by Hitachi is in line with its global expansion plans. The Tokyo-based electronics firm had announced earlier that India was one of the 11 ‘key management areas’ for business expansion. And this move will help Hitachi reach its goal of Rs 8 billion (14 billion yen) in revenue by the fiscal year ending March 2016, according to the press release. Hitachi recorded revenues of $112.2 billion in the fiscal ended March 2011.