TDK Buys Lambda

Jul 20, 2005 4:08 PM
By David Morrison, Editor, Power Electronics Technology

Invensys has signed an agreement to sell its Lambda businesses to TDK of Japan for a gross cash consideration of $235 million (£134* million). Lambda comprises a 58.2% interest in Densei-Lambda KK, which is listed on the Tokyo Stock Exchange, and wholly owned operations in Europe and North America. Lambda manufactures power supplies and uninterruptible power supply systems.

In the year ended March 31, 2005, Lambda had sales of £229 million and operating profit of £11 million, before deduction of £8 million of operating exceptional charges. The gross assets of Lambda (including goodwill) subject to the disposal were £265 million on March 31, and the net assets (including goodwill) were £175 million. Invensys’ consolidated accounts contained a minority interest charge of £2 million and balance sheet minority interests of £65 million in respect of Densei-Lambda KK.

The transaction is subject to customary regulatory approvals and is expected to be completed on or before Sept. 30, 2005. The proceeds from this disposal will be applied toward satisfying the group’s liabilities.

Ulf Henriksson, chief executive designate of Invensys, commented: "This disposal is a further step in the group’s previously stated plans for the divestiture of non-core businesses. I am delighted that TDK has acquired Lambda, and I am confident that the business will prosper and grow under its ownership."

According to data provided by Micro-Tech Consultants, Invensys’s Lamba division reached approximately $375 million in worldwide sales of OEM power + telecom power products in 2004, ranking it sixth in that category. When the category was restricted to worldwide sales of just OEM power, Lambda’s revenues for that year remained at $375 million. That value placed the company fourth among vendors in the OEM power category. Meanwhile, in these same rankings TDK was listed in 13th place in worldwide sales of OEM power + telecom power products with about $294 million in sales in this category. TDK achieved a similar ranking in the OEM power-only category with approximately $250 million in sales.

Micro-Tech Consultants’ OEM power category consists of embedded, dc-output power supplies incorporated into a system, while telecom power consists of power products external to users’ equipment, accessory products and services related to power plants or power conversion, and batteries used in conjunction with the power equipment. Standalone batteries and UPS products with ac output are not included.

*Gross consideration of US$235 million converted at US$1.75/£1

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