Schneider Expands in Services with Deals to Buy Energy and Data Center Specialists

April 8, 2011
The global economy's emergence from widespread recession was sure to produce a wave of mergers and acquisitions in the electrical equipment sector as

The global economy's emergence from widespread recession was sure to produce a wave of mergers and acquisitions in the electrical equipment sector as manufacturers with cash reserves or access to credit sought to gain add-on capacity and new product and service lines that extend their reach in key sectors. Schneider Electric, Paris, France, has been active in the treasure hunt with three significant acquisitions announced over the past couple of weeks.

Schneider added two U.S.-based companies to its operations — an energy-procurement and services company and an engineering firm specializing in computer data centers — as well as a manufacturer of structured cabling systems based in India.

Schneider agreed to buy closely held U.S.-based energy procurement company Summit Energy Services, Louisville, Ky., for $268 million. Schneider described this move as an effort to increase its presence in energy services and smart grids, areas where the company said last year it was seeking acquisition targets.

Summit provides services in energy procurement, risk management, market intelligence, data management and sustainability consulting. It has more than 350 people based in 11 offices across North America and Europe and serves client facilities in more than 90 countries, Schneider said.

Summit said in an open letter to customers following the announcement of the acquisition that the benefits it would enjoy from the combination with Schneider include access to Schneider Electric's global reach, technical capabilities and financial resources enabling continued expansion in terms of services and technology-related tools, as well as increased geographic growth opportunities, Schneider expects this acquisition, which is subject to regulatory approval, will add revenue of about $65 million in 2011.

The acquisition of Lee Technologies, Fairfax, Va., which Schneider announced this week, adds a service provider concentrated on the North American data center market, where Schneider is already a major player in providing equipment and services.

Lee Technologies has over 300 employees and generated sales of about $140 million in 2010. The company specializes in mission-critical services such as remote monitoring command centers and on-site critical facility operations for data centers. Its key customer segments include federal government, financial services, telecommunications, information technology and healthcare markets.

“Lee Technologies possesses a deep and intimate knowledge of both its customers' needs and data center operations,” said Laurent Vernerey, executive vice president, Schneider Electric IT business. “This unique combination of business and technical expertise and total lifecycle service will broaden our client base, extend our advanced service capabilities and enable us to provide our customers a totally ‘managed’ contract to meet their energy conservation and reliability needs.”

As part of its plan to expand in the rapidly growing communications markets of India, Schneider announced the acquisition of Digilink, Mumbai, India, a structured-cabling systems provider.

Digilink has 92 employees, a manufacturing facility and a research and development center in Goa, and sales and distribution offices across the country. Schneider said Digilink is “a well recognized brand in structured cabling and network connectivity in India and has a strong presence in retail, educational institutes, government, financial services, small office and home office segments.”

Schneider said the acquisition also will help it expand in other new economies, particularly in the Asia-Pacific and Middle East regions with a well-established distribution network in the retail sector complementing its presence in enterprise segments and will generate significant cross-selling opportunities for Schneider's power and IT products.