ABB Ltd. (www.abb.com), the Zurich-based power and automation technology group, is on the acquisition trail again. The company announced on June 8 an offer to acquire London-based Chloride Group PLC (www.chloridepower.com), a provider of uninterruptible power supplies (UPS), for about 860 million pounds ($1.24 billion). The offer comes just two months after Chloride rejected an offer of 723 million pounds ($1 billion) from Emerson Electric Co. (www.emerson.com), St. Louis, and touched off speculation among industry watchers over a possible bidding war.
The ABB/Chloride announcement comes just over a month after ABB announced a similarly sized deal to acquire Ventyx Inc. (www.ventyx.com), an Atlanta-based software supplier to the energy industry. That deal, valued at more than $1 billion, was unveiled on May 5. Another ABB acquisition was announced on June 3, when the company said it agreed to acquire K-TEK Corp. (www.ktekcorp.com), a Louisiana-based supplier of level detection instruments. Terms of that deal were not disclosed.
Regarding the Chloride deal, ABB said that the boards of directors of both companies have agreed on a recommended offer price of 325 pence per share, for an offer price valued at about 860 million pounds. Chloride shareholders will also be entitled to receive a final dividend of 3.3 pence per share as proposed on May 24, 2010. The acquisition is subject to approval by Chloride shareholders, the UK High Court and certain regulatory authorities, ABB said. Chloride employs about 2,500 people and reported revenue of 336 million pounds ($483 million) in its fiscal year ended March 31, 2010.
“The combination of Chloride’s strong position in the fast-growing medium- to high-power UPS business with ABB’s global reach and complementary power and automation offering provides significant growth opportunities for both businesses,” said Joe Hogan, ABB chief executive officer. “The transaction is in line with our strategy to acquire companies especially in areas where demand is converging across both of these businesses.”
Chloride’s UPS offering is used in applications where power quality and security are critically important. This includes ABB’s traditional utilities and industrial customer base such as the oil, gas, and petrochemicals industry as well as new sectors in service industries such as data centers, financial institutions, hospitals and airports. The company has a strong service offering and a significant installed base.
Chloride would be integrated into ABB’s Discrete Automation and Motion division. “Chloride‘s strength in UPS solutions and ABB’s existing offering will provide customers with a very attractive package to ensure power quality and critical power supply. Chloride would become the global center for UPS within ABB,” said Ulrich Spiesshofer, head of the Discrete Automation and Motion division.
ABB’s power and automation offering for UPS customers includes drives, high- and medium-voltage switchgear, transformers, as well as low-voltage products and systems. With the integration of Chloride, ABB would be able to offer a broad package of power quality, security and related service solutions, the company said.
Chloride Group PLC
Emerson Electric Co.