Acquisition and Financial News To Kick Off The Year

Happy New Year. We are all hoping for a better year in 2022 than the past two. SARS-CoV-2 has evolved into a faster spreading but less lethal virus. Obviously that’s a survival tactic for it, but hopefully better survival for us. I made two trips at the end of 2021 and am planning to attend the ARC Forum in February if they let me in. We’ll see how travel goes from there.

I have a ton of news left from December. This one includes merger and acquisition news from PwC, Ethernet adapter shipments, Molex acquisition of connector technology, and finally more financial news with Claroty funding and acquisition of Mediagate. 2021 was a financially strong year in our markets. The overall market was stable, though, in the sense of market leaders and potential market disruptions. When I reviewed the ARC Advisory Group/Control Global top 50 Automation Companies, I was struck by the sameness over the years. The only real movement was a move by several companies to follow the conglomerate model of acquiring a disparate covey of companies. More on that later. This is a potpourri of that sort of news.

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Now back to the news

Industrial manufacturing resurgence powers M&A from PwC

This report is from Michelle Ritchie, Industrial Products Deals Leader, PwC US.

Global economies continue to be impacted by the pandemic underscoring the need to be nimble, dynamic and digital in today’s environment. Global M&A saw a strong bounceback in 2021 from the pandemic levels experienced in 2020. Industrial manufacturing M&A followed a similar trend with deal value increasing by 50% in 2021 over 2020, while deal volume remained stable over the same period. Growth in megadeals (transactions exceeding $1 billion in deal value) were driven by the need to access capital to scale up early-stage technology-driven ventures (including from special purpose acquisition companies known as SPACs), as well as by the traditional need for M&A focus on driving scale, product portfolio and geographic expansion. In the second half of 2021, increased volume reflected the investment in strategic focus areas and product and platform expansion.

We expect 2022 deal activity to continue strong. While increasingly elevated deal multiples could potentially temper buyer’s interests, multiples have drawn out more sellers, including private equity firms looking for an earlier exit and corporates hoping to monetize non-core assets. 

The pandemic prompted companies to carry out strategic reviews of their portfolios to assess not only critical acquisition needs to buildout capabilities but also divestitures of non-core assets in order to focus on — and invest in — new and existing growth areas. With ample willing buyers with substantial purchasing power, many companies took advantage of robust valuations in 2021 to execute strategic changes. The abundant inventory of assets in the market during this period led some companies to wait —  building what is expected to be a full pipeline of assets preparing to come to market as we head into 2022. The rebound in M&A activity in 2021 was fueled by companies investing inorganically through M&A to drive scale, expand product portfolios and extend into new markets. These trends are expected to remain critical as behavior shifts accelerated by COVID-19 are sustained beyond the pandemic.

Ethernet Adapter Shipments Stalled by Supply Constraints in 3Q 2021

In a report by Dell’Oro Group, Ethernet adapter shipments were stalled by supply constraints in 3Q. Ethernet adapter shipments are forecast to return to double-digit growth in 2022, as supply restrictions ease, and as Smart NICs create growth opportunities.

“Ethernet adapter port shipments declined seven percent year-over-year in 3Q 2021, as vendors faced various component sourcing challenges, with lead-times extending beyond 52 weeks in some extreme cases,” said Baron Fung, Research Director at Dell’Oro Group. “In contrast, Ethernet controller shipments have approached record levels, as we believe server vendors are increasing their inventories of controllers in anticipation of stronger cloud and enterprise demand ahead,” added Fung.

Molex Acquires Keyssa Wireless Connector Technology

Molex has acquired core technology and intellectual property (IP) from Keyssa Inc., a pioneer in high-speed contactless connectors. The acquisition of this unique wireless chip-to-chip technology, including over 350 filed patent applications, will accelerate Molex’s strategy to further expand and diversify its micro connector portfolio with highly flexible, cable-free connectors for near-field, device-to-device applications.

“Keyssa’s wireless chip-to-chip technology complements Molex’s developments in mmWave antenna connectivity to meet the growing demands for high data rate transmissions,” said Justin Kerr, vice president and general manager, Micro Solutions Business Unit, Molex.

The acquired technology operates at data rates up to 6 Gbps on the 60 GHz band with no WiFi or Bluetooth interference. The tiny, low-power, low-latency, solid-state contactless connectors can solve critical data transmission needs with minimal overhead. Molex plans to advance these current capabilities by supporting exponentially higher data rates and full-duplex communications. Additionally, Molex will leverage its longstanding signal integrity expertise and mmWave antenna capabilities to speed the commercialization of new contactless connectors while complementing its existing portfolio of products.

Claroty Announces $400 Million Funding and Acquisition of Medigate

Claroty announced raising $400 million in Series E funding and entering an agreement to acquire Medigate Tech Ltd., the leading healthcare IoT security company. The round brings the company’s total funding to $635 million, making it the most well-funded cybersecurity company in the industrial (OT), healthcare (IoMT), and enterprise IoT sectors.

“While connectivity between the cyber and physical systems in manufacturing, healthcare, energy, and other industries is driving significant competitive advantages via increased operational agility and resilience, it also creates greater exposure to risks with serious consequences for patient safety, public safety, and the environment,” said Yaniv Vardi, CEO of Claroty. “By combining Claroty and Medigate’s deep domain expertise and specialized technologies into a single platform, we will take a giant leap forward on our mission to secure the ever-expanding universe of XIoT for every connected organization. We envision a future where cyber and physical worlds safely connect to support our lives, and with such strong financial backing from the most prestigious firms in the world, we have the resources we need to make this vision a reality.”

ABB Retains Process Control AutomationMarket Leadership

The process control automation (Distributed Control Systems or DCS) market was ripe for consolidation. A few companies began to grow, most were candidates for acquisition. No company had a more voracious acquisition appetite than ABB. Part of its genius was the development of the 800xA platform designed as a way of bringing the newly formed empire together. It is now announced by ARC Advisory Group that ABB is the market leader for the 22nd consecutive year with about a 20% share of a $14 billion dollar market.

During 2020 ABB saw growth across key regions, despite the impact of the pandemic on the DCS market across industry. Energy transition and sustainability, as well as an upturn in DCS segments across the pharmaceuticals and biotechnology markets were key growth drivers for ABB.

The DCS market analysis and forecast report by ARC Advisory Group has been published annually for the past 40 years, with ABB consistently in the lead for more than half that time.

“ABB leads the field in DCS thanks to its domain knowledge in multiple industries, extensive service network, a continued investment in developing technology, loyal customers and digital solutions that meet rapidly changing customer requirements,” said Bernhard Eschermann, Chief Technology Officer, ABB Process Automation. “Much of our development is focused on advancing technology such as modular automation, select I/O and secure Edge integrated solutions which address new process and business challenges while protecting investments. We believe these type of solutions to be some of the catalysts needed for the successful implementation of industrial IoT and agile navigation within Industry 4.0.”

The recent launch of the latest version of ABB Ability System 800xA represents an evolution for automated control and plant operations of tomorrow. It is a process control system, an electrical control system and a safety system and a collaboration enabler, allowing further improvement of engineering efficiency, operator performance and asset utilization. In addition, ABB Ability Symphony Plus, is an industry leading DCS in the power, water and waste water markets and ABB’s Freelance offering is a DCS tailor-made for hybrid markets.

ARC’s report also highlights ABB Ability, ABB’s unified, cross-industry portfolio of digital solutions, which includes more than 170 Industrial Internet solutions and an Industrial Internet technology platform and cloud infrastructure. Drawing on insights across over 20 industries and more than 40 years of experience in digital technology, ABB Ability helps customers to develop new processes and advance existing ones by providing insights and optimizing planning and controls for real-time operations. These insights can then be fed into control systems like ABB Ability System 800xA and ABB Ability Symphony Plus to improve key performance metrics of plants and assets. With an installed base of 35,000 DCS systems across more than 100 countries ABB is a trusted leader in creating digital solutions for customers in the industrial space.

Phoenix Contact News From SPS Show

Phoenix Contact sent an executive report meant for the SPS show in Nuremberg. I have not heard much from that company for several years. That’s a shame. The company has been active, investing, growing, and pushing technology forward. I’ve summarized the high points from an extensive letter detailing achievements of 2021.

In addition to the situation surrounding the pandemic, the biggest challenges we faced in 2021 were on the material supply side. It started with one of the coldest winters in Texas history. The location experienced system downtimes and significant production outages for key components in plastic manufacturing. Storerooms gradually ran empty along the downstream production chains, resulting in significant malfunctions and additional expenses on the purchasing side in large segments of our industry, in particular in the first six months of the year.

Despite the tense situation on the raw materials markets and challenges related to the pandemic, it currently appears that Phoenix Contact will conclude the 2021 fiscal year with revenue growth of approx. 25 percent, and total revenues of € 2.95 billion. Growth in all of our key regions (Germany, Europe, the Americas and Asia) has been unusually uniform, and is over 20 percent everywhere. The same applies to the business units. This growth is also reflected in the significant growth of our workforce of almost 20,000 employees worldwide. In light of the overall very difficult circumstances, this is an outstanding result.

Phoenix Contact continued to invest and expand during the pandemic totaling around 180 million euros. It said the investment could have been higher except for delivery bottlenecks for machines and plants. These investments focused on further developing the location in Blomberg and China and on expanding production capacities of Phoenix Contact E-Mobility in Poland. Phoenix Contact has also invested in Russia and is now part of Europe’s largest technology park in Skolkovo, with 2.6 million m² of space. Here, industrial companies, research laboratories, start-ups, and a university offer a unique high-tech combination. In addition to investing in systems and buildings, over 10 percent of the total investment was in intangible assets. This percentage will increase in 2022 by more than 25 percent, a disproportionate investment compared to this year. This is a trend that we expect to continue seeing in coming years, as a consequence of increasing digitization.

Sustainability: A challenge and driver of growth

While politicians bicker and posture, companies lead the way toward sustainable growth. “The aspect of sustainability is a top priority in the investments in our new Building 60. However, sustainability is becoming an ever more important focus not only when constructing new buildings, but in many other activities as well, since climate change is one of the most urgent challenges of our time. We have already achieved many milestones on our journey towards sustainable business practices, focusing on our ecological footprint throughout our entire supply chain, as well as the impacts on social factors.”

We continue to work on achieving the goal we have set for ourselves, of global CO2 neutrality throughout the entire company. Currently, we are addressing Scope 1 and Scope 2 within the power supply. Scope 1 deals with our emissions at our locations directly within the company. Scope 2 mainly includes the electricity that we purchase. We are already CO2 neutral in Germany as of the beginning of the year 2021 for Scope 1 and Scope 2, and we have been neutral for both in Europe since July. It should be noted that, in addition to converting to green power by purchasing electricity made from renewable energy, as well as implementing energy-saving measures, we are also investing in global climate protection projects, such as in wind turbine generators in India or in Turkey. In the long-term, we will compensate for these volumes by further increasing our energy efficiency and expanding our own renewable energies.

Sustainability as the engine of the economy

From the standpoint of automation technology, however, the goal of sustainability also represents a tremendous economic opportunity. Extraordinarily high investments will be required in order to provide more people access to more sustainable well-being. All areas of our lives must be electrified, networked, and automated if we want to achieve full electric mobility in all sectors. From regenerative power generation to different stages of energy storage, we need major changes in transportation networks and distribution grids, even down to intelligent secondary substations. Once we have achieved this energy supply, however, we also need to make much better use of energy efficiency potentials and intelligent controllable consumers, such as intelligent home chargers, air heating pumps, or decentralized storage devices. Factories must be digitized, sectors must be linked, and energy must be converted and stored if sustainability is the goal. And electrical and automation technology will be used in all of these areas. We are facing an era that offers an extraordinary potential for growth to our entire industry. Phoenix Contact has begun aligning its entire product and service range towards this goal, with its perspective of an “All Electric Society.” In the dimensions of “electrification, networking, and automation,” we want to provide our customers with specific technologies that facilitate or simplify solutions for an “All Electric Society.” In the electrification area, we offer new products under “Power” such as the intelligent CHARX power supply for high system availability, or the new and modular overvoltage and surge protection device CAPAROC under “Protect.” We deliver each of these products with a clear goal of meeting the grid requirements of the future today. In light of future DC (or direct current) grids, we are already developing network technologies under the point “Electrification” to serve all needs of the market and of customers in this area as well. In the “Networking” area, the first industrial Single Pair Ethernet Switches and associated IP20 and IP6X plugs stand for the next generation of network communication in factory and process automation. These are flanked by special services in the network security area, which delivers not only independent security devices such as our MGuard series, but also benefits all network-based devices as a technological platform.

Future Automation Technology

Through my work with the Germany-based analyst firm IoT Analytics, I’ve been introduced to the German passion for a newer PLC technology. I read this as a reaction to Siemens’ PLC technology. A number of companies have been pushing what they call “PC-based” PLCs. Phoenix Contact is one of them, and I could count Beckhoff Automation, B+R (now ABB), and Wago among the crowd. American companies seem not so impacted by the movement overall. I’ve seen pockets of alternative control technologies over here. What the future holds is up in the air. I think it is possible that the growth of Internet of Things installations could spur growth for the PC-based technology perhaps with Siemens (Europe) and Rockwell Automation (US) still dominant in machine control. We’ll see how it plays. Here is more from Phoenix Contact’s point of view.

Openness and replacing proprietary systems are the keys to success. Phoenix Contact has already been demonstrating the value of openness consistently since 2016 with the PLCnext Technology Ecosystem.

Classic partnerships replaced by communities

Partnerships morphing into ecosystems and communities pop up everywhere. Phoenix Contact contributes to the trend. “Openness also means a new way of thinking about partnerships and collaboration. In order to best utilize available potentials within the industry and drive innovations forward, new opportunities must be created to exchange knowledge and trade in existing software solutions. There are many partnerships with a generally exclusive character in the industry. The idea of bringing together as many experts as possible from the fields of IT and automation in a global network of relationships, thereby providing access to expertise from throughout the entire industry, is a new one. The PLCnext Technology Ecosystem turns exclusivity into openness.”

Phoenix Contact has been promoting networking among international experts in the industry since 2017 with our own website to serve as a central platform of exchange for the PLCnext Community. (www.plcnext-community.net http://www.plcnext-community.net).  Phoenix Contact revised and further optimized the platform for the Community in November 2021. It offers better functions for digital networking and information. In addition to exchanging ideas and information via established platforms such as GitHub, Instagram, Facebook, YouTube, and LinkedIn, the PLCnext Community can also network here. This allows users, potential users, and software providers to become part of the global network of relationships between experts in the IT and automation fields in many different ways.

The hardware portfolio of the PLCnext Technology Ecosystem also continues to grow. Controllers are available in various performance classes within the PLCnext Control family – from devices optimized for edge use cases to modules for additional controller functions. PLCnext Extension Modules can be used to expand a PLCnext Control controller to the left. This makes it possible, for instance, to add further Ethernet interfaces or extend the system with Interbus or Profibus. Applications that require functional safety can also be retrofitted with an extension module.

Phoenix Contact Smart Business continues to develop its product portfolio, and will be offering new services in e-mobility and energy management starting in 2022. In the coming year, it will begin by offering a solution for billing charging processes for company electric vehicles in the private sector. The service is developed so that any home charger is taken into consideration, even home power generation with a photovoltaic system. By doing so, this service offers a universal, complete solution to companies and employees that can be used to significantly increase the attractiveness of electric mobility within the company. In addition, companies can achieve significant cost savings compared to charging an electric company car from the public grid, thereby significantly reducing fleet emissions.

Additional news and detail can be found at the Phoenix Contact website.

Acquisitions and Further Industrial Software Consolidation

Lots of news coming in recently. One definite trend we’re seeing concerns consolidation of the industrial software market. This is a drip, drip, drip of announcements. When will it reach a tipping point and a big player comes in with a major scoop? The other news coming in yesterday to note is this acquisition by NI. This exactly fits the profile NI has established for itself over the past five or so years. It’s a good move.

NI to Acquire NH Research, Enters into Definitive Agreement with Heinzinger

NI announced the acquisition of NH Research, LLC (NHR), a leader in high power test and measurement applications such as electric vehicles (EV) and batteries. The transaction closed on October 19, 2021. NI is also announcing that it recently entered into a definitive agreement to purchase the EV Systems business of Rosenheim, Germany-based Heinzinger GmbH, a European leader in high-current and high-voltage power systems and this deal is expected to close in Q1 2022.

These acquisitions will expand NI’s portfolio of electrification (EV), battery, and sustainable energy capabilities to provide customers with critical power level signal sensing, capture and analysis. NI, NHR, and Heinzinger serve highly complementary positions in testing components used in the automotive industry to rapidly innovate to electrify vehicles. We believe combining the strength of NI’s flexible EV test platform with these companies’ power conversion and power supply test systems expertise will optimize testing workflows and enable rapid responses to changing test needs, accelerating time to market for a broader range of customers.

The focus of the acquisitions is to accelerate NI’s opportunity in high growth EV applications. Due to the complementary nature of these companies to NI’s priorities of innovation and meeting customer needs, NI expects that there will be minimal cost synergies from these transactions. NI is funding both these transactions through a combination of its existing revolving credit facility and cash on hand. These two transactions will represent 3 percent to 4 percent of NI’s total revenue in 2022 and be accretive to earnings per share. Approximately 150 employees will be joining the company.

“We continue to be intentional with investments where we see high potential to accelerate our growth. The addition of expertise and complementary capability from these two leading technology companies will help strengthen and expand our systems offerings to shared customers in the fast-growing area of electrification,” said Eric Starkloff, NI President and CEO. “These companies demonstrate our continued commitment to delivering systems to our customers who are facing a once in a career technology inflection in electrification. We welcome the employees of NHR and Heinzinger as we collectively accelerate our long-term growth ambitions.”

Software Market Consolidation

Infor (recently acquired by Koch Industries) announced the acquisition of Lighthouse Systems, a leading provider of manufacturing execution system (MES) software for smart manufacturing. The company’s flagship product, Shopfloor-Online, helps manufacturing companies manage and improve manufacturing operations across production, quality, inventory, and maintenance. 

Lighthouse Systems’ MES solution, which can be fully integrated into Infor CloudSuite ERP (enterprise resource planning) systems, will help Infor address a critical customer requirement of 24×7 manufacturing operations. For those manufacturing companies that are looking to implement ERP and MES together, Infor anticipates that its ability to offer a fully integrated solution “out of the box” will significantly shorten time to value for customers. 

“MES solutions are critical for manufacturing organizations that want to ensure data consistency and real-time visibility across all plant operations,” said Infor CEO Kevin Samuelson. “Integrating these capabilities with our industry-specific ERP systems will help us deliver even more powerful solutions to manufacturing organizations, as they look to digitize their operations and grow their businesses.”

Based in Crawley, UK, about 30 miles south of London, Lighthouse Systems has major offices in the UK, the United States and Singapore. Its approximately 100 employees serve customers worldwide in focus industries such as automotive, building & construction, food & beverage, life science, machinery & equipment, packaging, and sustainable energy. 

Lighthouse Systems customers include Ball Corporation, Formica, Lucite International, Nissan, Benteler, and the Timken Company.

Tim Barber, company director at Lighthouse Systems, said, “We are delighted to join forces with Infor to further the operational excellence initiatives of our manufacturing customers. We have 30 years of experience delivering MES solutions to discrete and process manufacturers worldwide. These solutions are not only key to executing production efficiently, they also are essential building blocks for smart manufacturing and digital transformation.” 

Lighthouse Systems’ Shopfloor-Online product enables smart manufacturing by bringing all manufacturing operations into one central software system, which is accessible 24×7. The system, which can be deployed in the cloud or on-premises, connects the factory with a single thread of critical data that is accessible at the shop-floor level and throughout the enterprise.

Acquisitions, Standards, Blockchain, And More

This is the longest I have gone without posting in many years. It has been a busy week around the Manufacturing Connection office, though. I have been assigning soccer officials to games for 33 years. There were more schedule changes, injuries, and dropped games than any previous year. Not to mention several cases of Covid taking referees out for up to three weeks. Today is the last day of my season, so it’s back to normal. Further sign of back to normal comes from using my United and Marriott apps to book a trip to Houston for Rockwell Automation’s Automation Fair. I will be down there November 9-11. If you’re there, ping me. Perhaps we can meet for a coffee or something and some conversation.

Naturally, much news accumulated. Following are some snippets of information. I will follow up with more detailed essays next week.

Schneider Electric Innovation Summit

Schneider Electric held a world-wide Innovation Summit in October. The company’s overall focus seems to be electrical power. But it has a significant automation portfolio. The Summit theme was Powering The Digital Economy and CEO Jean-Pascal Tricoire discussed the many benefits of digitalization. Spokespeople discussed four new offers.

Under the broad theme of Efficiency Chief Marketing Officer Chris Leong discussed  Automation Expert. This universal automation solution actually launched last year. It “breaks dependency of hardware and software” with its virtualized controller. Leong noted that the IT world has recognized this architecture for years; it is time for the operations world to adopt.

Under the broad theme of Resiliency, she introduced SmartUPS the Ultra 5Kw. It comes in a 2u form factor with a lighter weight than previous models.

With the broad theme of Sustainability, Leong introduced RM Air Set Medium voltage switches. These gas insulated switches are insulated with pure air and include a small footprint. Also introduced were solutions for electric vehicles. EcoStruxure for emobility includes electric vehicle charger system called pro charger. Also included are Charging Expert that varies charging depending upon time and energy usage, EV Advisor, a cloud based monitor and control of a fleet of chargers.

Emerson Acquires AspenTech, Sort Of

Emerson and AspenTech announced that the companies have entered into a definitive agreement to contribute Emerson’s industrial software businesses – OSI Inc. and the Geological Simulation Software business – to AspenTech creating a new company called New AspenTech.  

The transaction accelerates Emerson’s software investment strategy as the company continues to build a higher growth, more diversified and sustainable portfolio, by creating an industrial software company with immediate scale and relevancy. Emerson expects the usual synergies (which realistically never materialize) and flexibility to strategically deploy capital for growth. Software businesses have different financials than hardware ones, and this financial structure may help Emerson in the way a similar financial structure has helped Schneider Electric with AVEVA. New AspenTech will be fully consolidated into Emerson financials and is expected to be accretive to adjusted EPS after year one.

Time Sensitive Networking

Things have been quiet in the Time Sensitive Networking (TSN) area for some time. So, it is refreshing to see the results of some activity. Avnu Alliance announced globally-scaled testing capabilities and a comprehensive update of its certification testing procedures at newly authorized, commercial test houses around the world. This advanced global certification program will streamline certification testing of devices with Time Sensitive Networking (TSN) capabilities, including devices implementing the Milan network protocol (using TSN) for professional media, making testing easier and more convenient for Avnu members around the world. 

Blockchain–A New Look

Blockchain has been highly touted as a useful technology for tracking transactions, supply chain, and even IoT. It failed to live up to expectations. In October, I talked with David Iseminger Founder and CEO, Upheaval LLC and developer of Ironweave blockchain. This new technology holds promise for fulfilling blockchain application in manufacturing. This new blockchain technology was built to scale ensuring business continuity, efficient collaboration, and meeting regulatory compliance with automated data creation. Its strength lies in technology that its data is immutable, locked by multiple hashes in each block. It allows millions of interactions per second, and it requires no risky or volatile coins. Finally, each block is independently encrypted with unique keys, it is immune to ransomware, its multiple backups are immediate and automatic, and it allows blocks of any size, any data from small IoT updates to medical images.

Dell Technologies at the Edge

And a few bullet points from Dell Technologies I have lifted from a press release. I once talked with Dell people when they developed the Edge Gateway and had an IoT group. That group has long since dispersed. Everyone I knew is gone except for two who moved into other groups. But, the company still provide some products at the edge.

  • Dell EMC VxRail satellite nodes extend automation and lifecycle management capabilities to smallest configuration to date for edge workloads 
  • Dell Technologies Validated Design for Manufacturing Edge with Litmus helps manufacturers make quick decisions to improve quality and reduce costs 
  • Dell EMC Edge Gateway connects multiple edge devices across operational technology and IT environments to deliver real-time data insights 
  • Dell EMC Streaming Data Platform optimizes GPUs to ingest streaming video and supports real-time analytics on Dell EMC VxRail and PowerEdge systems 
  • Dell Latitude Rugged laptops can withstand harsh edge environments while maintaining high levels of performance and connectivity 

Customized Robotics-as-a-Service Offering Lets Manufacturers ‘Hire’ Robots

It seems as if everything can be as-a-Service these days, now even robotics. Formic Technologies launched recently with a simple value proposition: hire fully customized robots from top vendors at a low hourly rate and no upfront cost. To help small and medium-size manufacturers benefit from automation, Formic handles every aspect of a financing and deployment—from scoping, engineering, purchasing, implementation, and maintenance. The company also guarantees uptime, with customers paying nothing for system downtime.

Purchasing robotics can be expensive and a capital expense rather than an operational expense. This results in a barrier to entry for smaller manufacturers dissuading them from deploying automation altogether.

“We started Formic because we saw all that automation can do, and we wanted to provide a way for any manufacturer to easily adopt automation in a simple, risk-free, and on-demand way,” said Saman Farid, CEO and co-founder. “With Formic’s fundamentally different approach to financing and deployment, manufacturers can do more with automation without high costs or a lengthy and complicated purchasing and deployment process.” 

Formic’s model was designed to systematically remove every barrier to entry, allowing manufacturers to deploy automation efficiently and cost effectively. Testing shows that Formic’s deployments are 50% faster than traditional approaches and save customers 42% on their operating expenses from the first day.

According to Farid, an engineer and robotics start-up investor who founded Formic with former Universal Robots salesperson Misa Ikhechi, a unique combination of products and services make Formic’s model possible:

  • Systematized deployment processes
  • In-house equipment financing
  • Formic-designed solutions featuring products from leading robotic vendors such as Universal Robots, Fanuc, and ABB

“We came to the conclusion that what manufacturers needed was not any specific new technology, but a better way to access the technology that would best meet their needs,” Farid said. “Formic offers that access at a fraction of the cost or energy, as Formic takes on the heavy lifting.”