Schneider Said to End Exclusive Talks With Avago on CST
Schneider Electric SA (SU), the French maker of low- and medium-voltage equipment, ended exclusive talks to sell its sensors unit to semiconductor maker Avago Technologies Ltd. (AVGO), two people with knowledge of the matter said.
The discussions broke down last week because Avago wasn’t interested in some of the French plants of the Custom Sensors & Technologies unit, said one of the people, who asked not to be identified because the talks are private. Schneider will continue talks with potential buyers for the whole unit, the people said.
Schneider picked Avago’s bid over a joint offer from private equity firms Carlyle Group LP (CG) and PAI Partners SAS, which was about 10 percent below the Avago bid, two people with knowledge of matter said in August. The division may fetch about $1 billion, they said last month.
CST, based in Moorpark, California, makes sensors that react to changes in pressure or temperature and are used in industries including transport, aeronautics, construction, energy and manufacturing.
Schneider, based near Paris, last year suspended a plan to sell the asset because a lack of debt financing would have limited the amount of potential offers, people familiar with the matter said at the time.
Veronique Roquet-Montegon, a spokeswoman for Schneider, couldn’t immediately be reached for comment.
Schneider first considered a sale of the division before the 2008 global recession, people familiar with the plan said last year.
In 2010, the last year for which Schneider published earnings details for CST before folding the unit into its industry unit, the business had an operating margin before one- time items of 16.4 percent on 433 million euros ($543 million) of sales.
Created through acquisitions in the last decade, CST employs about 4,700 people and had $660 million in revenue last year, according to its website.
In 2005, Schneider bought the sensors maker BEI Technologies Inc. for $562 million, a year after purchasing Solectron Corp.’s Kavlico unit, which makes measurement and control systems. It bought French sensor maker Crouzet in 2000.
Avago, based in Singapore, was created in 2005 as a spinoff from scientific-analysis equipment-maker Agilent Technologies Inc. (A), which itself was spun off in 1999 from Hewlett-Packard. KKR & Co. and Silver Lake Partners bought Avago and took it public.
To contact the editor responsible for this story: Benedikt Kammel at firstname.lastname@example.org