Emergency Power to Join in Venture With French Firm
An Orange County power equipment firm said Monday it will join forces with a French company to capture almost 17% of the $600-million-a-year world market for uninterruptible power supply systems--a critical element in most large computer networks.
The joint venture between Emergency Power Engineering Inc. and Merlin Gerin SA of Grenoble, France, will be headquartered at EPE’s new 242,000-square-foot plant in Costa Mesa. The new entity will be called Ultimate Power Systems.
The marketing agreement is intended to help the fast-growing Orange County firm establish itself among the front-runners of the uninterruptible power supply industry, company officials said.
Uninterruptible power supply systems ensure that electrical currents remain constant despite unanticipated blackouts or surges. In blackouts, the systems transfer power to a generator without any loss of current.
The systems are critical to companies with large, computerized information- and data-processing installations and also are used in many industrial applications.
EPE officials said the worldwide market for such power systems is about $600 million a year, of which about half is in the United States. Combined sales of EPE and Merlin Gerin now top $100 million, company officials said.
The joint venture is an extension of a 4-year-old bond between the two firms. Ultimate Power Systems will sell the two firms’ lines of uninterruptible power supply systems and develop a new product line, said Robert Calvin, EPE’s vice president of operations. Calvin will be president of the new joint venture company.
Merlin and EPE began their relationship in 1982, when they agreed to share technology and license sales of each others’ products in the United States and in world markets.
EPE holds a slight majority in the joint venture, Calvin said, and most of Ultimate Power Systems’ executives will come from EPE.
The Orange County firm is one of the three largest domestic producers of uninterruptible power supply systems, Calvin said. It’s also one of the fastest growing. Sales for this fiscal year are expected to hit $70 million, up from $42.5 million in 1985 and $28.2 million in 1984, he said. The company currently has about 400 employees.
Calvin estimated that the market for uninterruptible power supply systems will grow 10% to 20% a year. Recent growth in the industry has been spurred by the widespread use of computers, which need a smooth supply of power to protect against data loss, Calvin said. He said a deterioration of electrical power service in the country also has helped increase sales of power supply systems. EPE started in 1971 as a consulting firm and has sprouted as a power supply producer in the 1980s. Calvin wouldn’t identify EPE’s customers except to say that many are Fortune 500 firms.
Merlin Gerin, a major electrical products manufacturer, has been a publicly traded firm since 1926. It posted sales of more than $1 billion last year.