Emerson Electric Co. (EMR) acquired a primary manufacturer of gas analyzers and monitoring systems, Cascade Technologies Ltd. on Dec 22. However, the news did not provide much impetus to the company’s shares.
Based in Scotland, Cascade Technologies utilizes the proven Quantum Cascade Laser (“QCL”) technology to enhance its processes. The novel technology is used to measure several gases at the same time leading to improved monitoring of industrial emissions. This improves operational competencies and helps to meet the stringent environmental norms. Additionally, the technology also comes with enhanced sensitivity and response speed along with useful fingerprinting capabilities.
This acquisition is a strategic initiative by Emerson to enhance its business. The QCL technology will be a key addition to the company’s Rosemount Analytical gas analysis division. Emerson’s business is likely to benefit from this innovative technology, which is especially useful for meeting analytics requirements in industries like petrochemical, pharmaceutical, food and beverage, automotive and marine as well.
On the other hand, Cascade Technologies will have increased opportunities for growth as Emerson will provide it with the much required international exposure as well as a strong foothold in the market.
Of late, Emerson has been restructuring its business strategically to drive growth, while augmenting competitiveness at the same time. The company has already started divesting underperforming assets to use the cash in its core business for repurchasing shares and pursuing acquisitions. Recently, the company divested its Power Transmission Solutions business to Regal Beloit Corporation (RBC) for approximately $1.4 billion.
Emerson currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look include Pioneer Power Solutions, Inc. (PPSI) carrying a Zacks Rank #1 (Strong Buy), and AO Smith Corp (AOS) carrying a Zacks Rank #2 (Buy).
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