Industrial manufacturing giant
) has completed acquisition of a unit of Gycom Group based in
Stockholm. The acquired unit engages in low-voltage power
distribution and the supply of control and automation components in
the Nordic countries, primarily Sweden, Denmark and Finland.
Per the agreement, Eaton will function in sync until October
2012 with Gycom providing operational assistance. Subsequent to the
transition period, both the companies will operate independently
effective November, 2012.
As both the companies have collaborated for a long time, we
believe that the acquisition will be accretive to its forthcoming
financial performance and will enable Eaton to strengthen its
In view of Eaton's last few acquisitions, it is quite evident
that the company is intent on diversifying its portfolio and
expanding its line of businesses as well as global footprint,
particularly in Europe, Middle East and Africa ("EMEA") and the
Asia-Pacific region by taking the inorganic route.
Recently, Eaton completed the acquisition of a Turkish company
Polimer Kauçuk Sanayi ve Pazarlama A.S, a manufacturer of
industrial and hydraulic hoses. This transaction will bolster
Eaton's presence in the emerging markets and also expand its global
coverage, with respect to its hose product segment.
Eaton has already inked some significant deals in this fiscal.
These include the acquisition of Irish electrical equipment
Cooper Industries plc.
), and South Korean track drive motors manufacturer Jeil Hydraulics
As of March 31, 2012, the company had a cash balance of $367
million. We believe that Eaton's strong cash position enables it to
pursue a steady inorganic growth strategy.
Cleveland, Ohio-based Eaton Corporation provides an array of
products: powertrain, truck and automotive systems, electrical
components and systems, hydraulics and pneumatic systems for
commercial and military use.
Eaton Corporation currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating.
EATON CORP (ETN): Free Stock Analysis Report
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