VARs See Potential, Possible Conflicts In APC Acquisition

The Merlin Gerin (MG) brand is maintained in the United States by some channel partners for Schneider Electric, but the company employs a channel model that makes heavy use of channel representatives in a manner that differs from APC's distribution strategy.

"From a channel standpoint, I think [Schneider Electric and MG] are looking to purchase a presence in the computer integration and distribution model," said Greg Santschi, vice president of LED Enterprises, a Dallas-based solution provider and APC reseller. "[Schneider Electric] needs a presence in the channel, and this gives them a presence in the channel."

APC announced Monday that it had agreed to to be acquired by Schneider Electric in a $6.1 billion deal, which is expected to close in the first quarter of 2007. Some APC channel partners see potential for product overlap and conflict, but most said they have been satisfied enough with the maker of data center power and cooling solutions and uninterrupted power supply (UPS) products to take a wait-and-see approach.

Santschi said he expects to see some changes where product lines overlap and, in that scenario, for MG large system-based products to win out. Some solution providers believe the two companies could have a smooth merger.

"There might be a nice synergy there, putting together electric manufacturing and distribution, along with UPS," said Michael Hernandez, an area manager for National Power Corp., a Fort Lauderdale, Fla., APC channel partner. "It's hard to foresee. I don't know which management team is going to prevail."

Several APC channel partners lauded the company's product line and technology, saying its products for the midmarket data center have been especially strong. If changes inside the company take place but leave the products and branding alone, some VARs said they would be content to carry on delivering APC-based solutions.

"It totally depends on how [Schneider Electric] runs the company," said Eric Van Dyke, president of Wireless and Barcode Inc., a Wyoming, Mich.-based reseller and APC channel partner. "If they want to restructure it, it's going to basically change the way I view the company and buy their products.

"As far as I'm concerned, keep the branding the same," Van Dyke said. "If it says 'APC' on the front of it, and the product performs the same, I don't care. If they start changing the business, I don't know. It works now."

An APC spokesman said the company is declining to comment on the deal beyond the press release on the acquisition that was issued Monday morning.