Emerson Buys Enardo - Analyst Blog

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Emerson Electric Company ( EMR ) acquired Enardo LLC to expand its Process Management division's storage tank solutions for oil & gas, and petrochemical and chemical industries. The financial details of the acquisition were not disclosed.  

The acquisition is a strategic decision by Emerson as the business of Enardo perfectly complements the existing business of Emerson's Process Management division. The Process Management division primarily manufactures and markets pressure regulators, relief valves and related products both domestically and internationally. These technologies facilitate in controlling pressure and flow of industrial gas and liquids, and natural gas and propane gas.

Now with Enardo on board, Emerson expanded its safety equipment portfolio as Enardo's business primarily comprises manufacturing tank and terminal safety equipment such as hatches, vent, pressure and vacuum relief valves and flame arrestors used in the oil and gas, petrochemical, chemical and other industries. Further, with the acquisition of Enardo, Emerson broadened its capabilities to both the upstream and downstream markets.

With about $65 million in sales in 2012, Enardo is a market leader in its segment with a strong brand name. Enardo was previously a division of HMT, a leading provider of above ground storage tank products and services based in Texas.   

In Sep 2013, Emerson had acquired India-based private company Virgo Valves to strengthen its Process Management division's presence in the high potential oil & gas industry. With complementing business line, geographic synergies and perfect alignment of business strategy, these acquisitions are expected to boost Emerson's Process Management revenues probably within the first year itself.

The Process Management division of Emerson provides products and technology as well as engineering and project management services for precision measurement, control, and monitoring and asset optimization services across industries. In fiscal 2012, the segment contributed 28.9% of the total revenue (highest across the company segments). In the latest reported quarter, the company reported 3% increase in sales driven by strong performance in the energy and chemical end markets.

Emerson currently carries a Zacks Rank #3 (Hold). Other stocks in the industry that look promising at the moment are Plug Power Inc . ( PLUG ), Rexnord Corp . ( RXN ) and Quanta Services Inc . ( PWR ). Rexnord has a Zacks Rank #1 (Strong Buy), while Plug Power and Quanta Services carry a Zacks Rank # 2 (Buy). 



EMERSON ELEC CO (EMR): Free Stock Analysis Report

PLUG POWER INC (PLUG): Free Stock Analysis Report

QUANTA SERVICES (PWR): Free Stock Analysis Report

REXNORD CORP (RXN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: EMR , PLUG , PWR , RXN

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