Schneider Electric has acquired California-based Pelco Inc, a designer, developer and manufacturer of video security systems.

The video security industry is shifting from pure analog communication protocols to more high value-added Internet protocol (IP) and software-based solutions. It complements or replaces other security systems, such as intruder detection, fire alarm or access control.

Schneider Electric said Pelco is the best possible fit to expand into building automation and security because of Pelco’s following characteristics: 

  • Leader in the fast-growing video security industry

  • Highest brand recognition in the industry

  • Broadest product line in the industry with the ability to offer full end-to-end solutions

  • Strong innovation capabilities with significant R&D investments representing 7.5 percent of sales

  • Premier customer base thanks to world-class technical support and customer serviceStrong sales and marketing organization with a wide geographical coverage (130 countries)

  • Solid track record of above-industry growth with a CAGR of 21 percent over the period 1997–2006 (sales of $506 million in 2006)

  • Significant potential for profitability improvement through operational leverage (earnings before interest, taxes, depreciation and amoritization [EBITDA] of $46 million and earnings before interest, taxes and amoritization of $30 million in 2006)

Significant advantages have arisen from the leveraging of Schneider Electric’s Building Automation businesses, including their respective distribution networks and the possibility to offer complete solutions.

Schneider expects the transaction to generate revenue and cost synergies estimated at $67 million on EBITDA in 2011.   EC