Eaton agrees to acquire Moeller Group; launches tender offer for Phoenixtec
Cleveland, OH — Eaton Corp. plans two acquire two electrical companies, in Europe and Asia Pacific, The Moeller Group and Phoenixtec Power Co. Ltd. Combined estimated sales of the acquisitions for the year ending Dec. 31, 2007, are approximately $2.0 billion.
Cleveland, OH — Eaton Corp
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Eaton Corp. plans two acquire two electrical companies, in Europe and Asia Pacific, The Moeller Group and Phoenixtec Power Co. Ltd. Combined estimated sales of the acquisitions for the year ending Dec. 31, 2007, are approximately $2.0 billion.
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The Moeller Group of Bonn, Germany , supplies components for commercial and residential building applications and industrial controls for industrial equipment applications. The company sells primarily to Western and Eastern Europe and Asia Pacific. Purchase price is€1.55 billion (U.S. $2.23 billion). The transaction, expected to close in first-quarter 2008, is subject to regulatory approvals and customary closing conditions. The Moeller Group has estimated sales of €1.02 billion (U.S. $1.47 billion) and EBITDA of €170 million (US $245 million) for the 12months ending December 31, 2007. The company has 15 global production facilities, sales offices in more than 90 countries, and approximately 8,700 employees.
Eaton also announced a tender offer all shares of Phoenixtec Power Co. Ltd. (Taipei, Taiwan), which is listed on the Taiwan Stock Exchange. Phoenixtec makes single- and three-phase uninterruptible power supply (UPS) systems that are sold worldwide. Phoenixtec has leading positions in UPS markets in China, Southeast Asia, and Eastern Europe. Eaton’s offer price is NT $50 per share (U.S. $1.54 per share). Assuming 100% of Phoenixtec outstanding shares are purchased, the net purchase price would be U.S. $565 million.
The chairman of Phoenixtec and board members entered into agreements to tender shares representing 25% of Phoenixtec’s shares to Eaton. The offer is subject to regulatory approvals and customary closing conditions, including a minimum of 51% of shares tendered to Eaton. Estimated 2007 sales of Phoenixtec Power Co. Ltd. are NT $16.1 billion (U.S. $495 million) and estimated 2007 EBITDA is NT $1.7 billion (US $5.2. million). The company has manufacturing facilities in China and Taiwan, and employs approximately 5,800 people.
“ These two transactions further establish Eaton as a leading global supplier of electrical power distribution and control products as well as power quality equipment and systems,” said Alexander M. Cutler, Eaton chairman and CEO. “Once these acquisitions close, our Electrical business will have annual revenues in excess of $7.5 billion. Further, Eaton’s mix of international revenues, based on final destination of our products, will be between 55% and 60%…[these] actions clearly underscore Eaton’s success in expanding our electrical business globally. The Moeller Group’s broad portfolio of power distribution and control products that meet International Electrotechnical Commission (IEC) standards, along with its strong distribution network in both Western and Eastern Europe and its large-scale production facilities in several Eastern European countries, will significantly expand our competitiveness in electrical markets outside the United States.
“We are equally excited about the acquisition of Phoenixtec. The company’s leadership position in the China and Taiwan power quality markets provides us a strong foundation to sell our entire range of power quality products. In addition, the company’s engineering capabilities and its manufacturing facilities in Taiwan and China provide us the products, technical knowledge, and competitive manufacturing footprint to greatly expand our global power quality business.
" We expect these acquisitions to be neutral to our operating earnings per share in 2008 , and accretive by $0.25 to $0.35 per share in 2009. Our outlook in 2008 for Eaton overall, inclusive of these acquisitions, is for revenues to grow 25% and operating earnings per share to grow between 15% and 20%. We intend to finance the acquisitions with a mixture of cash, debt and equity. Our intent is to manage the long-term debt and equity issuances in a manner to maintain our current‘A’ long-term debt credit rating.”
— Control Engineering News Desk
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