Group EFACEC, the Portuguese company that built a power transformer manufacturing plant north of Rincon, has sold the plant and its assets to a company that says it will keep the 250 Effingham County employees and form a strategic alliance with Virginia Transformer Corp.
The deal will create the nation’s second-largest transformer business by capacity and size and third-largest in revenues, according to a news release issued by Virginia Transformer Thursday.
The assets of EFACEC’s Rincon facility are being sold to Caravels LLC, a woman- and minority-owned private investment company created for that purpose.
The sale of assets includes design and manufacturing technology, facility and equipment and the use of the brand EFACEC for a period of time.
Virginia Transformer Corp., a leading maker of custom power electric transformers for the utility, renewable energy, industrial, mining, oil and gas and other markets, will enter into a strategic alliance with Caravels.
Financial terms were not disclosed.
The alliance will develop and deliver advanced technology and services to customers around the world under the Virginia Transformer and EFACEC brands.
The deal will enable Virginia Transformer to offer a total package to the industrial, oil and gas, utility and renewable energy markets for power generation and transmission up to 500 million volt amps (MVA) in the 500 kilovolt (kV) class.
The alliance is subject to financial closing next month.
“Caravels intends to employ EFACEC’s experienced existing personnel in Georgia and use existing technology and processes to manufacture transformers,” the release said.
Group EFACEC of Portugal opened the EFACEC plant in April 2010 on the east side of Ga. 21 in the Effingham Industrial Park. When it opened, the company said the plant had 400 employees.
Effingham County Industrial Development Authority CEO John Henry said the company originally promised 400 jobs and a $40 million investment.
Though the company has only 250 employees, Henry said it has more than met its promises to the county because it has invested $120 million in the plant.
Henry said he’s pleased about the changes announced Thursday. “It should provide an impetus for the Effingham County-based facility and we will get the benefit of retaining our friends that have been in the management of the facility and the employees who work and live here in the community,” he said.
Dennis Webb, chairman of the IDA, said the acquisition should provide opportunity for continued growth of the Effingham facility.
“Virginia Transformers is a powerful presence in the transformer market and the addition of the Effingham facility should enable (them) to dramatically increase their market share in the large transformer market,” he said.
As part of the sale, Group EFACEC of Portugal will continue to provide technology consulting to Caravels when needed.
“We are very pleased, through this alliance, to offer large power transformers from EFACEC in the (Virginia Transformer) product portfolio,” said Prabhat Jain, president of Virginia Transformer. “We look forward to leveraging this relationship to strengthen our portfolio in the utility, renewable, oil and gas and industrial markets while broadening our product and service offerings to customers.”
The alliance means Virginia Transformer will have the flexibility to sell large power transformers for the eastern United States, Canadian and Central American markets with lower transportation costs.
The alliance also will give Virginia Transformer and Caravels more buying power to reduce material costs.
“This alliance will make EFACEC stronger through (Virginia Transformer’s) presence in the North American
energy market, complementing EFACEC’s positions in the oil and gas and industrial segment,” Jain said.
“Caravels believes in the future growth of the electrical power industry expected in North America over next 15 to 20 years,” added Neerja Gursahaney, managing partner of Caravels. “Using the Rincon plant as our platform, Caravels plans to add other transformer, switchgear and substation engineering businesses to the portfolio. We are committed to maintaining and expanding the Rincon plant and offering a higher level of service to its valued customers.”