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Schneider signs deal to acquire Citect

01 September, 2005

Schneider Electric has signed an agreement to acquire the Australian industrial software developer, Citect. The deal, which values Citect at about €48m, is subject to several conditions, including approval by the Australian Courts and a 75% acceptance by Citect shareholders.

Citect is one of the world`s largest independent suppliers of industrial automation software, and has sold more than 100,000 licences so far. Its traditional strengths have been in SCADA (supervisory control and data acquisition) software, but it has recently been moving increasingly into the MES (manufacturing execution systems) arena.

Schneider intends to integrate Citect`s products with its own open architecture industrial automation software. It plans to invest to make the Citect suite a core component of its software offering, and to help existing customers to migrate to the new integrated platform.

Schneider says that Citect will benefit from its global reach and from its ability to deliver complete industrial automation systems worldwide.

Citect, which employs around 350 people at 19 offices, operates around the world - including a UK office in Birmingham - but is particularly strong in the Asia-Pacific region. Last year, it generated revenues worth €38.2m. In the first nine months of 2005, it recorded a 17% sales growth and expects to earn €3.6m in the year to December - 20% more than in 2004.

More than half of Citect`s income is derived from services, including support and training.

Schneider is paying A$1.50 cash per Citect share, plus a special divided of A$0.05 per share, representing a 42.2% premium on the closing value of the shares on 18 October, the day before the deal was announced - and a 59.9% premium of the average price of Citect`s shares during the previous 30 days. Schneider expects the acquisition to meet its financial criteria, with a return-on-capital-employed of around 10% within three years of completion.

"Citect`s people represent an exceptional pool of talent," says Russell Stocker, executive vice-president of Schneider`s Asia-Pacific division. "They will bring R&D experience, end-user relationships, as well as an understanding of the SCADA/MES business model".

Citect shareholders are expected to vote on the proposed sale in December.

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