Schneider clinches Andover deal

The French firm expects high growth from BA, security biz
Sunday, August 1, 2004

ANDOVER, Mass. - As expected, Schneider Electric closed on its acquisition of building automation company Andover Controls, Security International and Integral Technologies in mid July, providing the French company with a reach in both the building automation and security markets.

The $403-million transaction pairs the three companies with a parent company that says it wants to grow within these sectors. Schneider Electric has characterized the building automation market as a high-growth opportunity, while security offers natural synergies.

“People are recognizing that you need to have certain size to exert any market influence,” said Terry Mc-Mahon, an analyst from BCS Partners in Leonia, N.J., who follows the building automation market.

For Schneider Electric, the acquisition gives it prime positioning in the competitive building automation business. Competitors include Siemens Building Technologies, Johnson Controls and Carrier.

Balfour Beatty, on the other hand, scaled back its U.S. operations thanks to deal. But shortly after announcing plans to sell the three companies, the U.K. company said it planned to buy a 50 percent interest in Hong-Kong based building group Gammon.

Given the competitive nature of the building automation industry and growth potential, McMahon said Schneider Electric’s acquisition makes sense. “Buildings are becoming a lot more complicated than they used to be and it takes automation to manage this,” he said.