The Rs. 225 crore deal will be completed by April
Zicom to diversify into new businesses
Schneider offers solutions in multiple segments
MUMBAI: Schneider Electric is to acquire the assets of the electronic security systems integration business of Zicom Electronic Security Systems. The two businesses are the building solutions group (BSG) and the special projects group (SPG) and Schneider will pay a consideration of Rs. 225 crore.
Zicom is the largest independent electronic security systems integrator in India having completed more than 1,000 projects in infrastructure, government facilities, commercial buildings and high-end hotels. Its institutional and government business is represented by BSG and SPG, the SME business by Zicom Retail Products and the fire business by Unisafe Fire Protection Services LLC, Dubai.
Zicom has been operating in all market segments since 1995 and now plans to focus on the home and SME electronic security markets and Middle East operations.
The business recorded revenues of about Rs. 200 crore in fiscal 2009 and subject to conditions and Zicom shareholders' approval, the transaction is likely to be completed by April.
The retained business of Zicom contributes 52 per cent of the total group revenue which was Rs. 375 crore for the nine-month period ended December 2009. Zicom will transfer 185 employees from its electronic security systems business and work in progress order book worth Rs. 80 crore to Schneider Electric. The turnover of Zicom's business acquired by Schneider stands at Rs. 179 crore as of December 2009 and has grown at an average of 30 per cent in the last five years.
Manohar Bidaye, Chairman, Zicom Electronic Security Systems, said, the exit from the integration business allowed the company to diversify into new businesses, alternative energy and aerospace engineering that have been identified and which were seen as sunrise sectors, with huge growth and margin possibilities. He also said that the transaction would make Zicom debt-free and leave cash for expansion.
With operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple market segments.
Schneider Electric India plans to quadruple the domestic turnover and according to Olivier Blum, Country President, Schneider Electric India, “this acquisition reaffirms our ambition in India and represents another major milestone after the robust development of the past years and the integration in 2009 of Conzerv Systems and Meher Capacitors, leaders in energy efficiency.”