Crompton Greaves buys US-based QEI for $30 mn

Crompton Greaves buys US-based QEI for $30 mn

Mumbai: Indian electrical appliances and capital goods maker Crompton Greaves (CG) said on Friday it had bought US-based QEI Inc for about $30 million in a deal that will allow it to penetrate North American automation market.

Mumbai-based CG will pay $24 million upfront, while balance $6 million will be paid as a conditional “earn-out" amount, it said in a statement.

Springfield, New Jersey-based QEI makes products for management of electric transmission and distribution networks. For year ended 31 July 2010, it had revenues of about $12.4 million and EBIDTA (earnings before interest depreciation, taxation and amortization) of $2.35 million.

“The acquisition will help CG in penetrating the North American automation market by using QEI’s customer references," it said.

This is CG’s ninth acquisition in past six years, latest being Sweden-based Emotron Group for €57.8 million on 19 May.

In January-March, the firm had posted a 6% decline in net profit to Rs218 crore ($48.21 million), on a net sales of Rs1,765 crore ($390.4 million).

At 10:21 am, shares of CG on the National Stock Exchange were 0.04% lower at Rs257.20 in volumes of 116,097 in a Mumbai market that was up 0.83%.

Year to date, the stock has declined about 17%, while the benchmark BSE 30-sahre Sensex fell about 11%.

According to Thomson Reuters Starmine, 11 out of 24 analysts covering the stock have a ‘strong buy’ rating and nine have a ‘buy’, with a mean target price of Rs299.68.