Fusion Corporate Partners

Schneider Electric will make a cash tender offer for all of Telvent’s shares at a price of $40 per share, which represents a premium of 36% to Telvent’s average share price over the last 3 months and values the transaction at approximately $2 billion. Abengoa SA has irrevocably agreed to tender its 40% shareholding in Telvent into the offer. Certain members of management of Abengoa SA and Telvent, who collectively hold approximately 1.5% of Telvent’s capital, have also agreed to tender their shares. The transaction is expected to close in the third quarter of 2011.

In March this year, Schneider acquired Kentucky based energy procurement and sustainability services business Summit Energy Services. In December 2010, Schneider acquired two French-based software technologies for building management companies: Vizelia, a software provider of real time energy monitoring of buildings, and D5X, a specialist in solutions to optimize commercial space utilization.

Based in Madrid and listed on NASDAQ, Telvent (symbol: TLVT) is a leading and highly-recognized software and IT solution provider of real-time management of smart infrastructures. It provides its customers with increased reliability and flexibility of power distribution networks as well as operational and energy efficiency of their infrastructures.

Jean-Pascal Tricoire, Schneider Electric’s President and CEO, commented: “The acquisition is in line with our ambition to become a complete solution provider for our customers.   Telvent offers software capability that complements and integrates with Schneider Electric’s offering.  It also brings complementary customer base and geographical coverage.  Together, we will be able to provide our customers with high value added solutions that integrate smart devices and full software capability, hence reinforcing our position in the smart grid and critical infrastructure space.  We look forward to welcoming the Telvent teams who will enrich the cultural diversity and capability of our company. ”

Telvent employs more than 6,000 people on a worldwide basis and operates in more than 19 countries.  It reported 2010 sales of approximately €753 million and adjusted EBITDA of €115 million. Its key markets are in Europe (42% of 2010 sales), North America (35%) and Latin America (16%).  Its presence in the other regions of the world is more limited (7% of 2010 sales) but growing.  Its five operating segments are: Energy (34% of sales), Transportation (28%), Environment (8%), Global Services (19%) and Agriculture (11%).

Schneider Electric expects the transaction to generate revenue synergies of €250-300 million by 2016 thanks to enlarged offerings, complementary customer bases and geographical exposure. The estimated impact on EBITA is of approximately €30-35 million by 2016.  The Group also aims to achieve cost efficiencies which could improve EBITA by up to €20-25 million by 2016.

In total, the full potential impact of revenue and cost synergies on EBITA is estimated to reach € 50-60 million by 2016, of which two thirds should be achieved by 2014.

France, Rueil-Malmaison & Spain, Madrid

Related articles:

• Schneider Electric acquires energy procurement and sustainability services business Summit Energy Posted on March 25, 2011
• Schneider Electric acquires two software technologies for building management companies Posted on December 15, 2010