Schneider Electric in exclusive talks to sell sensors unit for $900 mn

French electrical equipment maker Schneider Electric yesterday said that it was in exclusive talks with private equity firms The Carlyle Group and PAI Partners to sell its sensors unit based on an enterprise value of $900 million (€650 million).

As part of the proposed transaction, Schneider Electric would reinvest approximately $100 million for a 30-per cent stake along with Carlyle, PAI and the management of the unit under divestment, Custom Sensors & Technologies (CST).

Last month, Schneider Electric confirmed media reports that it was in talks to sell its US-based sensors subsidiary CST, two years after having abandoned previous plans for its sale due to market volatility. (See:  Schneider Electric once again in talks to sell sensors subsidiary)

In 2012, Schneider, based in the Rueil-Malmaison, France, abandoned the proposed sale of CST, after having  received offers from both its present suitors, as well as California-based chipmaker Avago Technologies.

"The proposed transaction would be consistent with the Group's practice to regularly review its strategic portfolio and focus on energy management and efficiency technologies, integrating complementary power and automation offerings.," Schneider said in a statement

It  said CST has limited synergies with other businesses of the Group and the proposed shareholding structure aims at "fully supporting CST's future growth and value creation".

It added the proposed offer is being negotiated with employee works councils,  and "all parties will enter into the final negotiations on successful completion of this process."

CST, based in Moorpark, California,  specialises in designing and manufacturing sensing, control and motion products.

Through its brands, BEI Kimco, BEI Sensors, BEI PSSC, Crouzet, Crydom, Kavlico, Newall and Systron Donner Inertial, CST offers electronic sensors, controls, and actuators used in factory and industrial process automation, aerospace and defense equipment, and a wide range of transportation applications.

CST's products, which include DC motors, optical encoders, servo systems, and trackballs, help determine exact positions and link the actions of precision mechanisms, such as automotive stability-enhancement systems.

The company has operations across Europe, Asia, Latin America, Mexico, and the US. CST employs about 4,700 people globally, and posted revenues of around $600 million in 2013.

It currently reports under the industry business of Schneider Electric.