Rockwell Automation’s recent huge investment in PTC for only 8% of the company has sparked a number of thoughts on strategies not only of Rockwell Automation, but also other companies in the market. We’re looking not only at Rockwell Automation in this brief analysis, but also Siemens, Schneider Electric, and ABB.
I’ve left out Emerson, Honeywell, and Yokogawa. The only interesting thing in that part of the market is Emerson’s abortive run at acquiring Rockwell. That was strange. I don’t think that Emerson could have digested such a meal.
The analysis is not to knock anyone but to look for trends and strategies of some of our major suppliers.
I think it begins with Siemens. An executive explained the company’s digital factory strategy and vision many years ago. Then the company acquired UGS and added PLM, CAD, and other digital technologies. There followed other similar acquisitions. I’m thinking mainly of the COMOS product, here.
If you are looking for an articulation of the strategy, I suggest looking no further than Industrie 4.0 and cyber-physical systems.
Sticking with Europe and the competition over there, let’s consider Schneider Electric. This company has been building the “electrification” side of the business which also brought industrial control products and some automation–think Modicon. While it lost considerable market share in PLCs, it did remain in the market. Then it acquired Invensys adding a lot of software (something it never really was good at) but especially process control (Foxboro, etc.). This latter helps it in the power market segment and positions it well against ABB. Siemens of course is the main competitive target. Then is a strange move, Schneider used its software businesses (Wonderware, etc.) as an investment in AVEVA grabbing 51% of the company. Now it, too, has a digital factory strategy in place.
ABB, a strong competitor in the power side of the business and also in process control, acquired B+R Automation. That company was a strong second-tier machine automation supplier fleshing out ABB’s portfolio in the discrete, or machine, automation market. Then it acquired GE’s industrial business strengthening ABB in the “electrification” market. Sounding familiar.
Now look at Rockwell’s investment. That company has flirted with Dassault Systemes over many years for a PLM-to-Control strategy. But nothing ever came of it.
A couple of years ago it acquired thin-client manufacturer ACP and systems integrator Maverick Technologies and MagneMotion a supplier of motion control and conveyor technologies. Then came a large investment in PTC for a small percentage of the company. I speculated that this could be a Digital Factory play along with the respected analyst Joe Barkai, but my friend Keith Larson writing for Putman Publishing (and someone I trust to accurately report on what suppliers are saying) reported that the sought-after prize was a closer integration with ThingWorx. This would be a piece of the Rockwell strategy of “Connected Enterprise” and Larson reported that the target RA product is its MES offering.
In other words, Rockwell Automation seems focused not on the current buzz of Industry 4.0/Industrial Internet of Things/Cyberphysical systems/Digital Factory, but on “making our customers more productive.” Its roots are plant floor and it remains a plant floor supplier.
I am NOT predicting any acquisition of Rockwell Automation, but I do believe that the market needs some continued consolidation. The next five years will be interesting in this market.
Acquisitions are always interesting news. They always signify something about the industry. Sometimes it’s consolidation in a mature industry. Sometimes it’s larger companies growing, adding technology, or adding talent.
In today’s news, there is some of each.Remember when the robot and vision markets were thriving—especially the small SCARA robots? Those days are long over. The price of vision systems plummeted. Just look at the capabilities of the camera and software in your smart phone.
The first announcement is that Omron is acquiring Adept Technology. The second is Emerson Process Management adding some interesting technology to its portfolio.
The only thing surprising to me is the acquirer, not the fact that Adept is being acquired. Those cards have been played a long time ago. Omron Corporation and Adept Technology, Inc. announced that the two companies have entered into an agreement whereby Omron will acquire Adept.
Omron plans to acquire 100% of the outstanding shares of Adept common stock through an all cash tender offer followed by a second-step merger. It will offer Adept investors $13.00 per share of Adept common stock, which represents a 63% premium over the closing price for Adept’s common stock on September 15, 2015. This values Adept at approximately $200 million. It will fund the tender offer through cash on hand.
The tender offer is expected to commence on or about September 23, 2015, and the transaction is expected to close on or about October 23, 2015. The closing of the transaction is subject to customary closing conditions, including at least a majority of shares of Adept common stock being tendered in the offer, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and receipt of required foreign antitrust approvals. The transaction has been unanimously approved by the Boards of Directors of both companies.
Commenting on the acquisition, Yutaka Miyanaga, Omron Industrial Automation Business Company President, said, “We are delighted Adept Technology, a world leader in robotics, has agreed to join Omron. This acquisition is part of our strategy to enhance our automation technology and position us for long term growth. Robotics will elevate our offering of advanced automation.”
Rob Cain, President and Chief Executive Officer of Adept, added, “We are excited about the opportunity to join Omron, a global leader in automation. Together, our products will offer new innovative solutions to customers all around the globe.”
Following the transaction, Rob Cain will continue to lead Adept and will report to Nigel Blakeway, Chairman, Chief Executive Officer and President of Omron Management Center of America, Inc., Omron’s wholly owned United States subsidiary.
Emerson announced it has acquired Spectrex, Inc., a leading manufacturer of flame and open path gas detectors. With this addition, Emerson Process Management will have the most comprehensive line of flame, gas, and ultrasonic leak detector solutions used for safety monitoring in the industry.
Spectrex will join the Rosemount portfolio of measurement and analytical technologies. Terms of the acquisition were not disclosed.
For nearly 34 years, Spectrex has been the leader in flame and open path gas detection. It developed the world’s first ultraviolet-infrared (UV/IR) and triple infrared (IR3) flame detectors and was first to introduce xenon flash lamps in open path detector design, increasing detectors’ resilience to atmospheric conditions while reducing power consumption. These innovative advancements in safety monitoring provide a powerful solution for customers in the oil and gas, petrochemical, chemical and power industries.
“We are very excited about adding the Spectrex product line to our flame and gas detection portfolio,” said Tom Moser, group vice president of Emerson Process Management’s measurement and analytical technologies. “Emerson is committed to helping our customers protect their employees, facilities, and the environment, and we are now better positioned to serve that need.”
Spectrex and its staff are located in Cedar Grove, N.J., with sales and technical support offices in Houston, the United Kingdom, and Taiwan.
I saw on the Automation World and Packaging World Websites that the company, Summit Media LLC, has sold to the Packaging Machinery Manufacturers Institute (PMMI). I figured that there had to be a sale endgame for the owners. They have had a long relationship with PMMI, and this makes sense for it–at least as far as Packaging World goes. It’ll be interesting to see what becomes of Automation World. Maybe they’ll leave it alone. It should be profitable.
All I can say is congratulations to the principal owners Lloyd Ferguson and Joe Angel. The took a chance starting a magazine (first Packaging World, then with Dave Harvey, Automation World), worked hard, invested shrewdly. They deserve the payout.
Things changed a lot when Dave Harvey passed away four years ago that led to new ownership situation. It was time for me to move on. Not that it wasn’t somewhat traumatic. Now things will change a lot again. I’ve been through numerous buyouts as an employee. There are always many assurances at the beginning, and then reality sets in.
When I was contemplating a change in 2013, Dr. Henry Cloud released “Necessary Endings.” It seemed to speak directly to my situation. Now, I’m refocusing again. And Cloud has released a new book, “Never Go Back.” Again he seems to be talking directly to me. I recommend both books as a means to help you open your eyes to your situation and help you move on and grow.
In 10 days or so, I’ll be at a Schneider Electric software user group. This is the old Wonderware/Invensys event. I’m betting that it will be totally different from the old Wonderware gatherings. Even different from the ones Invensys held. It is looking like marketing is moving to the old APC group. Its message is energy management and power. Sometimes they don’t even pay lip service to automation.
<sigh> Many changes in the industrial control and automation market over the past 11 years. What I’m trying to do now is figure out the new directions and hot technologies and go there. I’m not tied to advertisers or tradition. So, let’s dive into what’s new. All thoughts welcome. Drop me a line at gary@The ManufacturingConnection.com with your thoughts of what I need to cover to keep all of you at the forefront ot technology and stratagies.
While I was in Orlando at the ARC Forum, I had an opportunity to meet with Schneider Electric EVP Clemens Blum (whose portfolio includes process automation now) and Invensys leader Mike Caliel. It was just a general conversation. No news. But perhaps that’s the good thing. The organizational structure is coming along. I have heard of only a few people so far who have lost jobs because of the acquisition. Mr. Blum had an obviously well thought out strategy for integrating process control into the company.
I am by nature either optimistic or engaging in wishful thinking, but I think in the end this was the best result short of Invensys Process trying to go it alone. In that latter case, I’m not positive it could have raised enough capital to fund growth.
Still thinking of European companies, Siemens Industry has really undergone a transformation–in terms of visibility at any rate. Helmuth Ludwig, CEO of Siemens Industry, his boss Eric Spiegel, and Raj Batra, president of Siemens Industry Automation have really been making the rounds promoting American manufacturing. They were just in Cincinnati along with The Atlantic magazine for a session. Now I see there is a big event in Detroit in a couple of weeks that promises a lot of seminars plus some thought leader speakers. This is very interesting. For many years, Siemens was a very quiet control and automation company in the US. This new leadership is really stirring things up.
In addition, I’ve seen releases from ABB (a Swiss company) promoting American manufacturing.
Much of this is coordinated with initiatives by the Obama administration to promote manufacturing. While Americans seem reluctant to embrace anything touching Obama, Europeans are gladly touting the American manufacturing renaissance.
We certainly live in interesting times.
Henri Lachmann, Chairman of the Supervisory Board
I have been digesting the news from earlier today that Schneider Electric has put in a $5 billion bid for Invensys. I’m a bit surprised at the timing, but not shocked at the bid.
I thought maybe Invensys was positioning for a break up, with Foxboro/Triconex going to Emerson and maybe the software business spun off. But the company no doubt prefers a single sale.
Schneider no doubt is looking longingly at its European rival, ABB, which bills itself as the “power and automation” company. The two overlap in markets a little on the power side. Schneider essentially has no process automation. Its discrete (factory) automation business has been treated like the proverbial orphan child. Do you remember when Modicon was a force in factory automation? And, does anyone remember Citect–the software business it acquired years ago?
Almost all the press releases emanating from US marketing deal with energy issues and products. Very little on automation. Nothing on software. Of course, after Schneider acquired APC that company’s marketing team became the Schneider North Americas marketing team. I suppose they promote what they know.
Who knows, maybe Emerson’s David Farr will take the bait cast by the Invensys board and raise the ante. I doubt it, but I’m not an M&A genius.
Maybe Schneider has been benchmarking Siemens. That company had a poor record of integrating acquired companies. It has done a much better job lately. The UGS integration into Siemens PLM has been great.
Maybe Schneider can integrate Foxboro and Wonderware without killing them off. We can only hope.
A statement on the Schneider Website offers hope:
Schneider Electric believes that the strategic and financial rationale for this transaction, if consummated, is compelling. Schneider Electric is considering making an offer for Invensys in order to increase its focus on the attractive industry automation sector. The enlarged group would significantly expand its access to key electro-intensive segments where Schneider Electric offers leading low and medium voltage as well as energy management solutions. It would also gain a leading position in the fast-growing software business for industrial operational efficiency.