Siemens Canada to acquire RuggedCom for $382 million
January 30, 2012 by LuAnn LaSalle The Canadian Press
Hardened network equipment supplier RuggedCom has agreed to a friendly deal with Siemens worth $382 million, giving Siemens Co. more access to North American and Asia-Pacific markets, the chief executive of Siemens’ North America said.
RuggedCom announced it has struck a deal with Siemens Canada Ltd. to sell the company for $33 a share, topping a hostile takeover offer from St. Louis-based Belden Inc.
“It’s very complementary to Siemens,” chief executive Helmuth Ludwig said during a conference call. “Together we would have a very significant sales footprint in each region of the industrial world, covering all industries that deploy these technologies, like power transmission distribution, as well as the huge market for industrial automation.”
Siemens’ bid for the global electrical manufacturer tops Belden’s offer, which was valued at about $22 a share or $272.4 million.
RuggedCom had rejected the Belden bid as too low and opportunistic, and had set up a so-called poison pill defence to thwart the transaction and seek alternatives.
The Siemens bid provides a $15 million penalty fee to be paid to the German electronics giant in case the deal fails to close.
Peter Crombie, chairman of RuggedCom’s board, said the Siemens bid is 50 percent higher than the Belden offer, has the unanimous support of the board and “provides fair value to our shareholders.”
Marzio Pozzuoli, RuggedCom’s CEO, said the friendly deal will benefit the company and help it grow.
“We have great respect for Siemens and believe RuggedCom will be well positioned for continued growth and industry leadership under their ownership. We are confident that, in addition to providing excellent value to our shareholders, this transaction will be beneficial to RuggedCom’s valued customers and employees over the long term.”
Headquartered in the Concord area of Vaughan, Ont., north of Toronto, RuggedCom designs and makes computers and communications networking technology designed for use in harsh environments such as electrical power substations, industrial facilities and military operations. The company has annual revenues of about $94 million US and 360 employees.
The deal is expected to close in late March.
Siemens Canada, based in Burlington, Ont., has about 4,400 employees and annual revenues of more than $3 billion. The company has 13 plants and 61 offices making and selling a range of electronic, technical and industrial products.
Belden, with some 6,800 employees, designs, manufactures and markets cable, connectivity and networking products in markets that include industrial automation, enterprise, transportation, infrastructure and consumer electronics.