Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (2024)

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11:30:00 25/10/2024 am IST
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7,778.00 JPY -0.45% Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (1) -4.34% +28.16%
26/07 Jefferies Adjusts Fuji Electric's Price Target to 9,900 Yen From 10,500 Yen, Keeps at Buy MT
25/07 Fuji Electric Co., Ltd., Q1 2025 Earnings Call, Jul 25, 2024

January 28, 2016 at 12:30 pm IST

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January 28, 2016 - Fuji Electric Co., Ltd. (TSE: 6504) ('FE'), headquartered in Tokyo, Japan, led by President Michihiro Kitazawa, the U.S. subsidiary Fuji Electric Corp. of America. reached an agreement to the effect that it takes over 51% of Canadian railway vehicle door opening and closing device manufacturer SEMEC Electromecanique Inc. (hereinafter, SEMEC). With this acquisition, we plan to expand the railway vehicle business in North America.

1. Background and previous initiatives
Currently, the railway vehicle markets are expanding in keeping with the rise in the global railway demand, and among these, the large scale North American market is expected to be at an annual average of 3.7% *1. In North America, growth is expected in the demand for replacements of urban railways in particular, and we anticipate that over the next five years we will replace an average of about 1,000 railway cars per year, out of the existing 13,000.
In the railway vehicle business, our company deals with the manufacture and sale of electrical equipment such as door opening and closing devices, propulsion (motors, inverters), auxiliary power units and the like, and in the focus area of the North American market, we have achieved results in delivering door opening and closing devices to the New York City Transit Authority, Metropolitan Washington D.C. Department of Transportation, Sonoma Marin Area Rail Transit District, and the like. In addition, we have supplied Washington subways with auxiliary power units.

*1: From the annual average expansion for the years 2011 ~ 2013 to the annual average expansion for the years 2017 ~ 2019 (UNIFE Report 2014)

2. Aims of acquisition
SEMEC is a specialized manufacturer of railway vehicle door opening and closing devices, which has achieved results in a great many deliveries in North America, from development, to production, to sales.
Through these acquisitions, we will add Fuji Electric's technological capabilities in design and production engineering to SEMEC's design door opening and closing devices and enhance our product strength. In addition, we will take advantage of SEMEC's manufacturing subsidiaries in New York in accordance with the Buy American Act (and similar laws and regulations in New York)*2. This will allow us to expand our railway vehicle door business in North America.

Fuji Electric established a power electronics equipment factory in May 2015 in Virginia, and we launched production of auxiliary power supply devices for railways from January of this year. While leveraging engineering strengths such as SEMEC's sales channels and after-service, we will continue to provide door opening and closing devices, propulsion, auxiliary power supply devices, and other such products locally for North American and Japanese railway vehicle manufacturers.
In this way, we will strive to achieve sales of ten billion yen (four times the current figure) in the North American railway vehicle business in fiscal 2020.
Further, in addition to North America, Fuji Electric will devote attention to markets in Asia and Japan and aim for sales of 20 billion yen in fiscal 2020 for the railway vehicle business.

*2: With the obligation to use a certain percentage of parts produced in the U.S. (from New York) and local assembly

3. Overview of target company investment

(1) Company name : SEMEC Electromecanique Inc.
(2) Established : 1991
(3) Location : Boucherville, Quebec, Canada
(4) Representative : Marco Lessard
(5) Subsidiary : SEMEC Corp. (Plattsburgh, N.Y.)
(6) Number of employees : 33 (consolidated)
(7) Main business : Manufacture and sale of railway vehicle door opening and closing devices

4. Overview of this investment

(1) New company name : Fuji SEMEC Inc.
Subsidiary : Fuji SEMEC Corp. (each renamed after our company's equity participation)
(2) Capital payment date : Mid-February, 2016 (planned)
(3) Investment ratio : 51% Fuji Electric
49% existing shareholders

■ Diagram of investment structure after this investment

Fuji Electric Holdings Co. Ltd. issued this content on 28 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 06:59:08 UTC

Original Document: http://www.fujielectric.com/company/news/2016/20160128150128545.html

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© Publicnow - 2016

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Chart Fuji Electric Co., Ltd

Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (2)

6504: Dynamic Chart

Company Profile

Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (3)

Fuji Electric Co specializes in manufacturing and marketing electric and electronic components. Net sales break down by family of products as follows:- electric equipments and systems (38.7%): generators, meters, electricity transmission and control systems, etc. for individuals and thermal and hydraulic industries;- electronic equipments and components (33.8%): magnetic contactors, magnetic contactors, uninterruptible power supply systems, power control systems, semiconductors, magnetic disks, energy distribution systems, etc.;- vending machines (12.4%): hot and cold beverages, snacks, money distributors, etc.;- industrial electric equipments (11.7%): primarily installation control systems, measurement instruments, power supply systems and captors;- other (3.4%).

Employees

27,717

Sector

Calendar

31/10/2024 - Q2 2024 Earnings Release

More about the company

Income Statement and Estimates

Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (4)

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Ratings

Trading Rating

Investor Rating

ESG Refinitiv

B+

Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (5)

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Analysts' Consensus

Sell

Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (6)

Buy

Mean consensus

OUTPERFORM

Number of Analysts

11

Last Close Price

7,778.00JPY

Average target price

10,400.00JPY

Spread / Average Target

+33.71%

Consensus

Profit revisions

Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (7)

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Fuji Electric : On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (8)

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Fuji Electric :  On the acquisition of a railway vehicle door opening and closing device manufacturer toward expanding railway vehicle business in North America (2024)

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