Crompton Greaves acquires US based QEI, Inc for $30 million

CG Power and Industrial Solutions Ltd. | Electric Equipment | Capital Goods & Industrial Consumables | BSE: 500093 | NSE: CGPOWER

27 May 2011 Evaluate

Crompton Greaves has concluded an arrangement for the acquisition of US based company QEI, Inc for an enterprise value equivalent to $30 million comprising of an upfront payment of $24 million followed by balance of $6 million to be paid as a conditional earn out amount. The acquisition is subject to certain regulatory approvals in US.

With this acquisition, the company has further, fortified its position in the SCADA and substation automation domain. Some areas of complementarities include Data Acquisition; Renewable SCADA; Transit; Substation Automation.

The acquisition will help CG in penetrating the North American automation marked by using QE’s customer references. The acquisition presents a highly scalable opportunity for CG to capitalize upon the distribution automation markets in North America, India and Europe. Currently, CG already has its operations based in the US through its earlier acquisition of Pauwels, Microsol and MSE Power System. This acquisition will further reinforce CG’s System integration capabilities for the T&D markets.

QEI is a market-leading provider of SCADA and automation systems, and products for the management of electric transmission and distribution networks. QEI has revenue equivalent of $12.4 million and earnings before interest, depreciation, taxation and amortization (EBIDTA) equivalent of $2.35 million, for the year ended July 31, 2010.