Rockwell Automation Inc. (ROK) recently announced the acquisition of a British company Lektronix, headquartered in Cannock, U.K, for an undisclosed price.
Lektronix is a leading independent industrial automation repairs and service provider in Europe and Asia, providing automation repairs, spares and other maintenance services for most industrial automation products, including programmable logic controllers (PLC), electric motor drives, industrial computers, and computerized numerical control (CNC) equipment. Customers of the company comprise manufacturers of a wide range of products, food and beverages operators and heavy manufacturing industries.
Reportedly, Lektronix’s management team will form part of Rockwell’s Control Products & Solutions operating segment. This acquisition is expected to help Rockwell grow its business across Europe and further penetrate emerging markets with the help of Lektronix’s 290 employees, 11 facilities and 8 repair centers in the Middle East, Europe, and Asia. Besides the high level of technical excellence and customer support that the Lektronix’s customers avail, they will also be able to receive benefits from the global network of Rockwell Automation products, services and solutions.
Rockwell customers possessing a large and diverse installed base of industrial automation products always look for the repair and maintenance partner with a wide portfolio of repair services to make the most of the productivity of plant. This necessitates further integration of Rockwell’s plant services business with Lektronix’s broad-based repair services, which eventually help the customers enter into maintenance and technical service contracts with Rockwell Automation.
Prior to this, Rockwell acquired Johannesburg based Hiprom, a leading process control and automation systems integrator, during the first quarter of fiscal 2011. The acquisition enhanced Rockwell Automation’s business growth in the Sub-Saharan region, while broadening its presence in the global mining and mineral processing market.
Soon after closing the deal, Rockwell reported its second quarter results, with revenues up 25% year over year to $1.46 billion, outperforming the Zacks Consensus Estimate of $1.4 billion. Earnings per share increased 48% year over year to $1.14, beating the Zacks Consensus Estimate of $1.12.
The financial position was also sound with $1.02 billion of cash and cash equivalents as of March 31, 2011, up from $813.4 million as of September 30, 2010.
Based in Milwaukee, Wisconsin, Rockwell Automation Inc. is an original equipment manufacturer of industrial automation equipment, application specific integrated software and consulting design services. The company is a leading global provider of industrial automation power, control, and information solutions. Rockwell Automation competes with the likes of ABB Ltd. (ABB), Emerson Electric Co. (EMR) and Siemens AG (SI). We currently have a Zacks #3 Rank (short-term Hold recommendation) on the stock.
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