Schneider Electric to Buy Pelco

French technology firm Schneider Electric announced today that it has purchased Pelco. The deal was worth approximately $1.54 billion in U.S. funds and is expected to close in October of this year.

A statement from Jean-Pascal Tricoire, CEO of Schneider Electric, said the move was designed to further Schneider's expansion into building automation and building systems. Schneider Electric, which operates globally, has previously been involved in electric and automation systems, but the company said that the integration of security into building automation systems is especially unique because it provides significant cost savings for customers.

"The video security industry is the most attractive segment of the security industry. It is shifting from pure analog communication protocols to more high value-added IP protocol and software based solutions," said Schneider in a statement released to further explain the acquisition. "It complements/replaces other security systems such as intruder detection, fire alarm or access control."

Pelco will be placed squarely within Schneider's Building Automation Group, where recent acquisitions of TAC, Andover Controls and Invensys Building Systems are already operating. That area -- building systems automation -- represents more than half of Schneider Electric's total business. By themselves, security system sales were worth approximately $212.4 million for Schneider Electric last year.

It apparently is a good time for expansion at Schneider. On Monday the company reported that its first half of the year net profits were at almost $1 billion, driven largely by organic growth around the world and 30-plus percent growth in the Middle East.

David McDonald, CEO of Pelco, called Schneider Electric an ideal partner for his company, noting that the companies aligned well in terms of technology development and customer service methods. He also stressed that, "Pelco will remain committed to the current business model without any disruption to Pelco’s service or any adverse changes."

"The combination of our companies will create a unique portfolio of products, services and solutions in the building management industry," said Schneider Electric's Executive Vice President of the Building Automation unit Arne Frank. "Pelco's unique position in IP-based video security represents a tremendous additional organic growth opportunity."

The acquisition follows closely behind Schneider Electric's largest acquisition yet, American Power Conversion, for which it paid $6.1 billion after the deal was approved in January. That firm creates uninterruptible power supplies and surge protection systems that are commonly used in data centers.

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See Schneider Electric announcement of Pelco acquisition