With a bid to expand its business in the Asia-Pacific region,
Rockwell Automation Inc.
) completed the purchase of medium voltage drives business of
China-based Harbin Jiuzhou Electric Co., Ltd. for roughly $83
million. The business will be incorporated within the Automation
Control Products & Solutions operating segment of Rockwell.
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Jiuzhou Electric mainly focuses on research and development,
manufacturing, sales and services of high power, electrical and
electronic equipment. It offers medium voltage drives, direct
current power supplies, switch gear and wind inverters.
Jiuzhou Electric serves a varied customer base including the
electric power, petrochemical, steel, metallurgy, municipal, cement
and construction industries. For seven years, it has been
Rockwell's contract manufacturer.
Rockwell decided to purchase medium voltage drives business of
Jiuzhou Electric earlier in August this year. The medium voltages
drives help in maximizing asset availability as well as manage
With this acquisition, Rockwell will be able to design, engineer as
well as manufacture medium voltage drives and power solutions. In
addition, it will be able to cater to a much wider customer base of
the entire Asia-Pacific region, thereby fortifying its presence in
the region's motor control market.
The ever expanding customer base in the Asia-Pacific region has
resulted in a soaring wave of demand for the efficient medium
voltage drives. Given the higher demand for Rockwell's medium
voltage drives, the business is growing significantly.
Rockwell's third-quarter fiscal 2012 earnings were $1.33 per share,
ahead of the Zacks Consensus Estimate of $1.31. Total revenue
soared 3% year over year to $1.560 billion, missing the Zacks
Consensus Estimate of $1.598 billion.
Based in Milwaukee, Wisconsin, Rockwell Automation is an original
equipment manufacturer (OEM) 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, however, faces stiff competition from leading companies
Emerson Electric Co.
). The company retains a short-term Zacks #3 Rank (Hold). We have a
long-term Neutral recommendation on the stock.