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Newall may move to Mexico if Schneider sells CST

20 March, 2014

The activities of Newall, the Leicester, UK-based manufacturer of linear encoders and digital readout systems, could be transferred to Tijuana, Mexico, if Schneider Electric’s planned sale of most of its Custom Sensors and Technologies (CST) business goes ahead.

A report in the Wall Street Journal, citing “people familiar with the matter”, says that Schneider plans to sell 33% of CST to each of two private equity funds, the Carlyle Group and PAI Partners. Schneider will keep a 30% stake in CST and remainder will be split among 80 CST executives, including CEO Eric Pilaud, who will leave Schneider.

The Newall business is the only CST subsidiary expected to be affected immediately by the sale, which would value CST at €700–900m. Other brands in CST include BEI, Crouzet, Crydom, Kavlico and System Donner Inertial.

Newall was founded in Peterborough in 1968 and, in 1973, developed its Spherosyn linear encoder technology which operates on an inductive basis, instead of the optical technology used by most of its rivals. It has no bearings, springs or internal moving parts, and is sealed against contamination.

Newall's linear encoders operate on an inductive principle

In 2004, California-based BEI Technologies bought Newall Measurement Systems, from B Elliott. The following year, Schneider bought BEI. More than 85% of Newall’s products are exported.

CST employs around 4,400 people worldwide and in 2012 recorded sales worth $604m. Its headquarters are in California and it has manufacturing facilities in France, the US, China, Germany, Morocco – as well as Newall in the UK.

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