Emerson Electric Co.EMR recently announced that it has completed the buyout of premium flame and open path gas detectors manufacturer Spectrex Inc for an undisclosed amount.
This acquisition, bringing with it a complete line of flame, gas and ultrasonic leak detector solutions extensively deployed for safety monitoring, will be particularly conducive for the company's operating arm, Emerson Process Management.
Spectrex had pioneered the development of ultraviolet-infrared (UV/IR) and triple infrared (IR3) flame detectors, which made it a trusted brand among customers in the oil & gas, petrochemical, chemical and power industries. Moreover, it was the first company to make xenon flash lamps that greatly enhanced the resilience of detectors to harsh atmospheric conditions.
Emerson plans to integrate Spectrex with its Rosemount portfolio of measurement and analytical technologies. The latter's innovative offerings, which helped it maintain a leading position in flame and open path gas detection for the past 34 years, will now aid Emerson to come up with solutions that will enable clients to protect employees, environment and facilities.
Emerson has an ardent eye for mergers and acquisitions, aiming to tap new technologies and markets across geographies for better growth. Year-to-date in 2015, the company completed six acquisitions with combined annualized sales of approximately $70 million in Process Management's final control, measurement devices and systems and solutions businesses.
During the third quarter of 2015, acquisitions contributed $7 million to total revenue of $2,084 million in the Process Management segment. We believe the recent acquisition will also be accretive to the company's overall sales performance, going forward.
Of late, Emerson's financial performance has been severely undermined by constant strengthening of the U.S. dollar and volatility in the oil & gas market. Moreover, the company anticipates that market uncertainties will persist in the remainder of fiscal 2015 through the first half of fiscal 2016.
At the same time, Emerson's restructuring initiatives have elevated its short-term expenses, thus proving to be a significant drag on its performance. Raising its projection for restructuring expenses for fiscal 2015, the company now anticipates it in a range of $160-$180 million.
Emerson currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the broader industrial goods sector include Rexnord Corporation RXN , AO Smith Corp. AOS and Energous Corporation WATT . While both Rexnord Corporation and AO Smith sport a Zacks Rank #1 (Strong Buy), Energous Corporation holds a Zacks Rank #2 (Buy).
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