ABB Divests Power Conversion Business

One more ABB news item. That company has made a flurry of news over the past several weeks.  ABB here has completed its portfolio divestments announced after some acquisitions in 2020. This one is the power conversion business for $505 million. ABB Ltd Chairman Peter Voser sees his firm acquiring between 5 to 10 small-to-medium enterprises a year to add to the company’s organic business, he said on Monday.

“Each division of ABB should be active in organic and inorganic strategies, which would see ABB acquiring between five to 10 small-to-medium business every year,” Voser told the Reuters Global Markets Forum on the sidelines of the World Economic Forum’s annual meeting at Davos.

Definitely a major realignment of the company has reached a normal phase.

ABB has reached an agreement to sell its Power Conversion division to AcBel Polytech Inc. for $505 million in cash. The transaction is subject to regulatory approvals and is expected to be completed in the second half of 2023. Upon closing, ABB expects to record a small non-operational book gain in Income from operations on the sale. The Power Conversion division, formerly Lineage Power, was acquired by ABB as part of the GE Industrial Solutions acquisition in 2018 and is not core to ABB.

The division is based in Plano, Texas, USA, and employs roughly 1,500 employees worldwide, predominantly at three major sites and the US headquarters. It generated revenues of approximately $440 million and Income from operations of approximately $50 million in 2022, with a clear focus on the North American market.

AcBel is one of the global leaders in the manufacture and design of switching power supplies. Besides offering power solutions for a wide range of applications including PCs, smart home appliances, smartphones, servers, and networking equipment, AcBel also emphasizes opportunities in sustainable energy and electric vehicles. AcBel is headquartered in Taiwan with over 8,800 employees worldwide, the company aims to power the world with sustainable energy and high efficiency power supplies.

QAD Acquires Redzone

Software company consolidation maintains hectic pace. I think I missed the 2021 announcement of Thoma Bravo acquiring QAD. I became familiar with QAD through a contact from GE who wound up there. However, I can’t believe it’s been 7 years since I became acquainted with the company, attended its annual conference, and spoke on a panel with a lively Q&A from the audience.

In this news, QAD has acquired Redzone. QAD is an ERP software and services provider. It has a significant MES-type offering. I remember visiting at least one plant using the software. (Hint: I don’t get enough plant visits any more. They are enlightening.)

Redzone, billed as the “Worlds #1 Connected Workforce Platform,” adds a component to the portfolio with mobile software solutions that can improve communication and collaboration with frontline workers.

This is the second acquisition completed by QAD in the last two months – in December, QAD acquired Livejourney, a provider of a real-time process mining and predictive modeling solution designed to discover, monitor and improve business processes.

Redzone received a growth equity investment from Summit Partners in 2020 and has continued to deliver strong growth over the last several years. In 2022, the Company defied a slowing SaaS market, accelerating bookings growth to 46 percent, adding over 100 new clients and over 200 new plants by meeting the critical needs of manufacturers with its suite of frontline Productivity, Compliance, Reliability and Learning applications. Global manufacturers that benefit from the technology include the likes of Nestle, Post Holdings and Tyson.  

Labor productivity improvements directly impact efficiency. Productive and empowered employees increase the effective capacity of a manufacturing plant and accelerate time to productivity for new employees. This gives manufacturers the agility they need while also reducing the amount and impact of employee attrition.

Recent worker shortages have plagued manufacturers and are not going away – according to Deloitte, the labor shortfall is likely to reach 2.1 million and cost the economy $1 trillion by 2030. With the addition of Redzone, QAD now has a complete end-to-end solution for manufacturers to fully realize the potential of the Adaptive Enterprise from the shopfloor to the top floor, and from supplier to end customer.

Barclays served as financial advisor to Redzone, with Wilson Sonsini acting as legal counsel. Kirkland and Ellis LLP served as legal counsel to QAD and Thoma Bravo. 

Waev Consolidates Industrial Electric Vehicle Business

A certain South African-born, attention-seeking entrepreneur has brought media attention to a market for electric vehicles. We long-time industrial people are (or should be) familiar with a variety of electric vehicles that have been traversing aisles in manufacturing plants for decades.

My question to Keith Simon, CEO and founder of Waev, was what could possibly be new in this world of electric material handling equipment.

Waev was founded not even two years ago to bring together three businesses from Polaris. Skipping the gory details, Waev encompasses the businesses of GEM, Taylor-Dunn, and Tiger. The company encompasses the manufacture, distribution, marketing, and support of these product lines.

Simon told me that they are researching and incorporating a variety of advanced electrification and electrical architecture technologies. Advances come in a variety of ways from batteries to motors. Another advance includes communication and even visualization of routes and pick ups.

Located in Anaheim, CA, we are an electric mobility provider dedicated to solving the mobility market’s challenges with nimble innovation and comprehensive solutions. We proudly manufacture, distribute, market, and support the GEM, Taylor-Dunn, and Tiger brands. GEM is an established leader in the EV low-speed vehicle (LSV) space and has been for more than 20 years. Taylor-Dunn has a rich 70-year legacy of providing trusted industrial vehicles to the market. Tiger heavy-duty tow tractors have been towing cargo, baggage, parcel, and other equipment in ground support applications since 1981.

Electric vehicles represent one of today’s most dynamic and growing trends. EVs today go beyond moving people and goods from A to B—they’re the epicenter of one of the most impactful market segments in the history of mobility. EVs give us innovative new ways to think about all aspects of transportation—from convenience, to safety, to environmental impact. Consumers, businesses, and governments are changing their lifestyles, perceptions, priorities, and regulations when it comes to mobility and sustainability. The evolving industries we serve are presenting opportunities that we could not have imagined 10 years ago.

The low-speed vehicle market intrigues me. I had not read about it before. There are many applications I could think of.

Always cool to see start up companies doing something useful for society.

Hexagon Invests 100 MUSD In Autonomous and Sustainable Manufacturing

This announcement is a little old. I’m trying to catch up. The interesting thing is less the actual announcement than that larger companies have started venture investment arms. Google Ventures has been a boon to that company. We’ll see how they play out in our market segment.

Hexagon AB has assembled a number of pieces into a large industrial technology supplier. Think of its acquisition of PAS a while ago. This news concerns a 100 MUSD investment in Divergent Technologies Inc., a pioneer of green manufacturing technologies with the first modular digital factory for the automotive industry.

Divergent has developed an alternative production process to traditional vehicle manufacturing called DAPS (Divergent Adaptive Production System) that addresses economic and environmental challenges head-on. DAPS is a fully integrated software and hardware solution, creating a complete modular digital factory for complex structures. The patented process combines AI-optimised generative design software, additive manufacturing (3D printing) and automated assembly to build lightweight automotive parts and frames.

The design software optimises the weight, strength and cost of vehicle models. Parts are 3D printed and assembled autonomously, reducing manufacturing time and human intervention. Regardless of the design, part manufacturing and assembly can be carried out using the same hardware infrastructure, enabling quick design iterations or seamless switches between different vehicle models without downtime. The design-agnostic process is less energy- and resource-intensive, delivers more efficient structures faster and achieves weight reductions between 20% and 70% leading to dramatic improvements in vehicle efficiency.

Founded in 2014 and headquartered in Torrance, California, USA, Divergent transforms car manufacturers into agile, design-driven organisations free from capex constraints. A tier-one supplier, its proprietary end-to-end solution is widely applicable to any structure-based, discrete manufacturing process and has already proven to meet the most demanding automotive and aerospace applications.

Protected by more than 500 patents, Divergent’s digital, modular, flexible, and automated production solution produces significantly fewer lifecycle emissions than traditional manufacturing. The company not only leads the automotive industry in breaking down capital, geographic, and environmental barriers, but it also has its own portfolio of hypercars, Czinger Vehicles, which produces the fastest production vehicle in the world – the 21C.

U.S. Chamber Calls on Lawmakers to Reject Gridlock and Pursue Agenda for American Strength

I refrain from politics on this blog and other places notwithstanding that I was in the 99th percentile on the political science graduate record exam at university and came close to a graduate degree in that discipline before I escaped into common sense.

I also am not a booster of the US Chamber of Commerce. However, throwing all that aside, I have to report on this news from them regarding today’s political agenda in Congress (and elsewhere). Kudos to CEO Clark and the organization for taking a stand. I don’t agree with their entire agenda, but that’s OK. Ideas and debate are good. Let’s quit making points on social media and start doing things to make the country stronger and better.

U.S. Chamber President and CEO Suzanne P. Clark – in the annual State of American Business address – today urged government to reject partisan gridlock, pursue an actionable agenda to strengthen America, and give businesses the best opportunity to succeed.  

“Business demands better from our government because when it comes to Washington, the state of American business is fed up,” said Clark. “The polarization, gridlock, regulatory overreach, and inability to act smartly and strategically for our future is making it harder for all of us to do our jobs and move this country forward.”  

“We need a government that works. A government that rejects gridlock and chooses governing. A government that can partner with the private sector on our biggest challenges and can engage globally to advance America’s interests, and the world’s. A government that limits itself to the work only it can do — no more and no less.”  

Agenda for American Strength 

Clark called on Congress to begin work on an Agenda for American Strength that can “help us not only navigate the present moment but also steer our country to the brighter, stronger future that we expect — and future generations deserve.” 

Clark outlined a forward-looking, aspirational agenda to strengthen our country in five key areas: building, people, energy, global leadership, and the rule of law. She stressed that progress can be made on national priorities immediately through practical, actionable steps, and highlighted the following key actions that Congress and the Administration should pursue this year: 

Pass a permitting reform bill to deliver on the investment made in infrastructure; 

Secure our nation’s border, protect Dreamers, and increase the number of employment-based visas; 

Fix worker shortages by improving access to childcare and incentivizing work; 

Accelerate permitting for new American energy exploration and production, finalize a legally required 5-year program for offshore leasing, and make it easier to build energy infrastructure;

Work in partnership with the private sector to achieve climate resilience through innovation; 

Resume free and fair trade negotiations and pursue new deals; 

Tackle head-on the challenges with China, while maximizing the benefits America can and must derive from continuing to do business with the world’s second largest economy in areas consistent with our national security and values;  

End lawsuit abuse by going after litigation funders; and 

Enact policy changes to help law enforcement and prosecutors make our communities safe and fight organized retail crime. 

Equally important, Clark noted, is what government should stop doing: instituting a government-knows-best approach that burdens American businesses with overregulation and micromanages our economy.  

Fighting Overregulation through the Courts 

“The unprecedented regulatory overreach has accelerated over the past two years,” said Clark. “When I gave this speech last year, I pledged that if government didn’t stop getting in the way through overregulation, we would lead the fight to stop it. And that’s why the Chamber sued the FTC, the SEC, and the CFPB last year. And we won’t hesitate to do it again if that’s what’s needed to protect business interests, preserve innovation and competition, and position our economy for growth.”  

“Our message to our partners in government today is very simple,” said Clark. “Do your jobs, so we can do ours. Make government work, so business can keep working … so companies of all sizes can keep doing the things that society needs, expects, and trusts us to do. America is a great and capable nation, and together, we can do the big thinking and take the smart steps to secure the future we deserve and strengthen this country that we all love.” 

McMenon Acquires Flowmeter Line from ABB

This news came to me via a UK company called McMenon Engineering Services. It concerns ABB, too. To quote from McMenon, “A UK manufacturing company’s growth plans have taken an exciting leap forward with the acquisition of a state-of-the-art product line from Europe.”

A range of Variable Area (VA) Flowmeters will now be manufactured in Workington, Cumbria, after McMenon Engineering Services Ltd was chosen by global technology company ABB to make the VA flowmeter product portfolio that had been produced by ABB in Germany. 

Following the acquisition, McMenon, under a supply partnership agreement, will continue to supply VA meters carrying the ABB brand and the meters remain part of ABB’s product offering.

McMenon, a worldwide manufacturer and supplier of quality flow and temperature measurement instrumentation, and ABB have a long-standing partnership.

With this acquisition, McMenon, already a highly recognised name in the global flowmeter and temperature instrumentation market, will now be placed among the top global manufacturers of VA flowmeters. ABB customers will see no difference and can expect the same product quality they are used to. 

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