Schneider Electric becomes joint worldwide leader in solid state relays by acquiring Crydom-brand assets
Rueil Malmaison, France – November 2, 2005 – Schneider Electric announced today the acquisition of US-based Silicon Power Corporation’s solid state relay assets, sold under the Crydom brand name, for a total amount of $71 million.
By combining the Crydom assets with its existing offer, notably through Crouzet, Schneider Electric will become the joint worldwide leader in solid state relays.
A major player in semi-conductor switching technology, Crydom is a benchmark brand in solid state relays. It leads the market in the United States, where it generates 60% of total sales, and enjoys strong positions in Europe, especially in the United Kingdom and Germany. In 2005, the solid state relay business is expected to achieve sales of around $30 million and operating profit close to $8 million.
Solid-state technology, which offers high performance in terms of product durability and reduction in energy consumption, is particularly well suited to thermal regulation, lighting management, and noiseless applications in the buildings and machines markets (notably in medical). Solid state relays are technological products, sold through specialized distribution networks, which can meet emerging customer needs for greater comfort and reliability.
For Schneider Electric, the solid state relay business offers significant potential thanks to its dynamism (market growth above 5% a year on average), and strategic fit with the Company’s existing operations in Industrial control (worldwide leader in contactors).
Schneider Electric expects to extract synergies from the combination of Crydom’s offer and skills with its own solid state relay business, to propose a comprehensive range of products for a broad array of customers around the world, while enhancing its innovation capabilities.
Eric Pilaud, Executive Vice-President Strategic Deployment of Schneider Electric, commented: “This acquisition will allow us to propose our customers an offer that covers all their global needs for catalog products and customized solutions. Crydom’s professional teams and strong expertise in solid state technology are exceptional resources for accelerating our growth in the solid state relay market.”
John Royan, Chairman of Silicon Power Corporation, added: “This project will help strengthen marketing of Crydom-brand products, in terms of both geographic spread and technological performance. We are convinced that we will offer customers promising opportunities by combining the two activities.”
Subject to regulatory approval and other customary conditions, the transaction should be finalized in the first quarter of 2006.
Schneider Electric expects this acquisition to meet its financial criteria, with a Return On Capital Employed around 10% within 3 years from completion.
About Silicon Power Corporation’s solid state relay business
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