Japanese electric & thermal energy major Fuji Electric Co. Ltd. has acquired Consul Neowatt Power Solutions, Chennai based leading power backup manufacturer for Rs.720 crore). This is the first ever acquisition of the $8-billion Fuji Electric in India, which has a $1-billion UPS & inverter industry. Fuji Electric was advised by KPMG India for the transaction.
Fuji Electric is in the final stages of discussions to acquire Consul Neowatt Power Solutions, a Chennai based power backup manufacturer, in a deal worth $100 million (Rs 700 crore), ET first reported on 29 March.
Tokyo based Fuji Electric, in order to expand its power electronics systems business in India, has entered into an agreement with private equity fund Peepul Capital Fund III LLC and the individual shareholders to acquire the entire shares of Consul Neowatt Power Solutions Private Limited (CNPS), a major power electronics manufacturer in the country, Fuji said in a press statement.
Fuji Electric will own 99.99% stake in the new company – Fuji Consul Neowatt Power Solutions while Indian arm will hold .01% stake.
Consul Neowatt offers a wide range of power electronics products spanning online UPS, stabilisers, isolation transformers, industrial inverters and solar inverters.
The $8-billion Fuji Electric established Fuji Electric India in 2009, and opened a low-voltage AC Drives factory in 2015. That same year, FE also established an engineering company (Fuji Gemco Private Limited) as a joint venture with a local company.
Fuji will expand its power electronics systems business in India, targeting mainly the manufacturing industry and the data center market, which has been booming in recent years, by leveraging Consul Neowatt’s network of sales and service centers across the country, it added.
Consul Consolidated was founded by four promoters N Ramesh Sankaran, KN Raja, N Sunder and NP Krishnan in 1981. Peepul Capital acquired a majority stake in 2012 with an investment of $25 million and hired Sriram Ramakrishnan as CEO. In 2014, Consul was merged with Pune based Neowatt Energy.
In 2013, the company had acquired Pune-based Megatech to expand its portfolio of UPS and solar products.
Fuji Electric has made multiple buyouts globally in last couple of years such as 70% stake buyout in N2telligence, a German fuel cell company; buyout of Canadian rail manufacturer SEMEC Electro-Mecanique Inc.; turbine and power plant service business of US based RTS Holdings; and Indonesian vending machines maker -P.T. METEC SEMARANG.
The UPS & inverter market witnesses a fast growth following the increasing demand from various sectors such as IT -ITeS; telecom, textiles, hospitality, financial services and insurance, manufacturing and energy. Major players in Indian UPS market are Consul Neowatt Power Solutions, Su-Kam Power, Delta Power Solutions, Amara Raja Electronics, HitachiNSE 0.25 % HI-REL Power Electronics, Microtek International and Schneider Electric.
The power backup systems industry in India has seen several inbound acqusitions by multinational companies to strengthen their positions here. In 2011, Schneider Electric, had acquired a 74 per cent stake in Luminous Power Technologies for Rs 1,400 crore while another French major Legrand Group acquired the UPS business of Numeric Power Systems Ltd for $171 million in 2016. Earlier in 2010, Legrand had acquired the switchgear division of Indo Asian Fusegear Ltd.
Founded in 2000, Peepul Capital LLC is an India focused private equity firm with $700 million under management. Investee companies include Unibic Cookies, fashion brand Voylla, childcare centre Klay, Ecom Express, Medplus, personal care brand Banjara’s, Cura and Maiyas.
Source: Economic Times