French group Schneider Electric has signed an agreement to acquire Chinese Leader & Harvest Power Technologies Holdings, a group based in Beijing, and specialize in medium voltage variable speed drives, one of the key components for energy efficiency. The price is based on an enterprise value of approximately $ 650 million, or 450 million euros.
Variable speed drives allow motors of industrial energy savings of up to 50%. They are particularly useful in markets such as electricity-intensive power generation, mining, minerals and metals, oil and gas, and water and water treatment.
“It is estimated that approximately 70% of medium voltage motors in the world are not yet equipped with drives, ” said Schneider.
The group “has recently estimated that by 2020 energy efficiency would represent an additional market potential of 45 billion dollars per year”, which would mean a substantial share of emerging markets.
Leader & Harvest, which employs over 750 people including 100 engineers and 150 sales, has a distribution network in 30 provinces of China. Its sales this year, estimated at around EUR 100 million for an EBITDA margin of around 20%, have recently experienced an annual growth exceeding 20%.
According to Schneider Electric, the Chinese market for variable speed average is about 40% of the global market.