One of the leading power electronics companies in India, Numeric Power Systems Ltd is selling its UPS (uninterruptible power supply) system business to Legrand of France for Rs 829 crore.
The €4.25-billion Legrand is an electrical and digital building infrastructure company. The board had recommended a “special dividend” out of the proceeds to its shareholders. On the NSE today, the share of Numeric closed at Rs 281.50.
Legrand's India subsidiary, India Asian Electric Pvt Ltd has bought the business from Numeric along with the rights to the brand name, trademark and the IP”, Mr R. Chellappan, Managing Director, Numeric Power Systems, told a press conference here today.
The deal includes Numeric's subsidiaries in Sri Lanka (Numeric Lanka Technologies Pvt Ltd) and Singapore (Numeric Power System Pte Ltd). The consideration of Rs 828.64 crore does not include non-compete fee — which will accrue to him and not to the company.
Mr Chellappan said that Numeric would also transfer three of its nine manufacturing and trading facilities — two in Puducherry and one in Parvanoo (in Himachal Pradesh), to Legrand.
“For some time, the management of this vertical will remain with us, and all our 2,600 employees will be intact with the brand”.
Core business
What makes eyebrows go up is that the UPS vertical has been the company's core business, contributing over 90 per cent of its Rs 535-crore turnover (for 2010-11). Where will the company deploy these funds?
Apart from the ‘special dividend', a substantial portion of it will also be invested in growing the company's green energy (solar power) division. “In fact, we are in talks with a couple of players in the solar power industry,” he said. Besides solar power, Numeric also has play in the steel castings industry with Amex Alloys, which it acquired in 2011.
Numeric is one of the leading UPS brands in the country with 16 per cent share of the overall UPS systems market. “Our market share was 20 per cent in the online UPS market and we command over 70 per cent in the BFSI (banking, financial services and insurance) business segment,” Mr Chellappan said.
Brand growth
Commenting on this, Mr Yves Martinez, Managing Director, Legrand India, said: “It is our objective that Numeric, Legrand and Indo Asian Switchgear will keep their current network, product catalogue, teams, commercial terms, and continue to develop fast on their own.”
Legrand intends to accelerate the growth rate of all brands, by continuing sustained growth investments — such as launch of new products, addition of commercial manpower and international expansion.
rravikumar@thehindu.co.in