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Emerson (EMR) to Buy Afag, Boost Factory Automation Portfolio
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Emerson Electric Co. (EMR - Free Report) entered into a definitive agreement to acquire Afag Holding AG, a provider of electric linear motion, feeding and handling automation solutions.
The acquisition will expand Emerson’s capabilities in factory automation. The combination of Afag’s electric linear motion solutions and EMR's pneumatic motion technology will create a leading motion portfolio. The buyout will help EMR expand into lucrative end markets — battery manufacturing, automotive, packaging, medical, life sciences and electronics — currently served by Afag.
Afag’s electric linear motion segment will expand Emerson’s served market by more than $9 billion, driving organic growth in the long term.
Subject to customary closing conditions, the transaction is expected to close by the end of Emerson's fiscal 2023. Afag will be part of Emerson's Discrete Automation sub-segment within Intelligent Devices.
Emerson aims to expand operations through inorganic activities. Earlier this week, the company announced a deal to acquire Berlin-based Flexim. The acquisition will add to Emerson’s existing flow measurement positions in coriolis, differential pressure, magmeter and vortex flow measurement, and expand its automation portfolio and measurement capabilities.
Emerson aims to become a pure-play global automation company to drive growth and profitability. To this end, the company has been restructuring its portfolio, divesting non-core/non-profitable businesses while simultaneously acquiring strategic businesses. Aligned with this strategy, in April, EMR inked a deal to acquire National Instruments Corp (NATI) for $8.2 billion. The acquisition will strengthen EMR’s global automation foothold, helping the company expand into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles and aerospace and defense.
Headquartered in Austin, TX, National Instruments produces automated test equipment and virtual instrumentation software. National Instruments generated revenues of $1.66 billion last year.
As part of restructuring actions, in June, Emerson divested its Climate Technologies business to Blackstone. The divestment advances the company’s goal of becoming a leader in the field of automation. In November 2022, EMR completed the divestment of its InSinkErator business to Whirlpool. The divestiture helps the company divert resources to key growth areas.
Zacks Rank & Key Picks
Emerson carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the Industrial Products sector are as follows:
A. O. Smith has an estimated earnings growth rate of 13.7% for the current year. The stock has rallied 21.8% in the year-to-date period.
Eaton Corporation plc (ETN - Free Report) currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of approximately 3%, on average.
Eaton has an estimated earnings growth rate of 16.3% for the current year. The stock has soared 36.6% in the year-to-date period.
Enersys (ENS - Free Report) presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 10.3%, on average.
Enersys has an estimated earnings growth rate of 45.7% for the current fiscal year (ending March 2024). The stock has gained 32.1% in the year-to-date period.
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Emerson (EMR) to Buy Afag, Boost Factory Automation Portfolio
Emerson Electric Co. (EMR - Free Report) entered into a definitive agreement to acquire Afag Holding AG, a provider of electric linear motion, feeding and handling automation solutions.
The acquisition will expand Emerson’s capabilities in factory automation. The combination of Afag’s electric linear motion solutions and EMR's pneumatic motion technology will create a leading motion portfolio. The buyout will help EMR expand into lucrative end markets — battery manufacturing, automotive, packaging, medical, life sciences and electronics — currently served by Afag.
Afag’s electric linear motion segment will expand Emerson’s served market by more than $9 billion, driving organic growth in the long term.
Emerson Electric Co. Price
Emerson Electric Co. price | Emerson Electric Co. Quote
Subject to customary closing conditions, the transaction is expected to close by the end of Emerson's fiscal 2023. Afag will be part of Emerson's Discrete Automation sub-segment within Intelligent Devices.
Emerson aims to expand operations through inorganic activities. Earlier this week, the company announced a deal to acquire Berlin-based Flexim. The acquisition will add to Emerson’s existing flow measurement positions in coriolis, differential pressure, magmeter and vortex flow measurement, and expand its automation portfolio and measurement capabilities.
Emerson aims to become a pure-play global automation company to drive growth and profitability. To this end, the company has been restructuring its portfolio, divesting non-core/non-profitable businesses while simultaneously acquiring strategic businesses. Aligned with this strategy, in April, EMR inked a deal to acquire National Instruments Corp (NATI) for $8.2 billion. The acquisition will strengthen EMR’s global automation foothold, helping the company expand into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles and aerospace and defense.
Headquartered in Austin, TX, National Instruments produces automated test equipment and virtual instrumentation software. National Instruments generated revenues of $1.66 billion last year.
As part of restructuring actions, in June, Emerson divested its Climate Technologies business to Blackstone. The divestment advances the company’s goal of becoming a leader in the field of automation. In November 2022, EMR completed the divestment of its InSinkErator business to Whirlpool. The divestiture helps the company divert resources to key growth areas.
Zacks Rank & Key Picks
Emerson carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the Industrial Products sector are as follows:
A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 10.5%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
A. O. Smith has an estimated earnings growth rate of 13.7% for the current year. The stock has rallied 21.8% in the year-to-date period.
Eaton Corporation plc (ETN - Free Report) currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of approximately 3%, on average.
Eaton has an estimated earnings growth rate of 16.3% for the current year. The stock has soared 36.6% in the year-to-date period.
Enersys (ENS - Free Report) presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 10.3%, on average.
Enersys has an estimated earnings growth rate of 45.7% for the current fiscal year (ending March 2024). The stock has gained 32.1% in the year-to-date period.