The British Invasion
One if by land; two if by sea! It may not have been what our forefathers had in mind, but U.S. control companies should take note. The British are coming.In February, two independent automation suppliers, both located in California, were acquired by companies in the U.K.On February 6, Action Instruments, a $20 million supplier of signal conditioners, announced its acquisition by Eurotherm...
One if by land; two if by sea! It may not have been what our forefathers had in mind, but U.S. control companies should take note. The British are coming.
In February, two independent automation suppliers, both located in California, were acquired by companies in the U.K.
On February 6, Action Instruments, a $20 million supplier of signal conditioners, announced its acquisition by Eurotherm plc, a $350 million publicly held company specializing in temperature controllers, recorders, and drives.
Action Instruments' founder and owner, Jim Pinto, says the two companies share similar people and technology cultures. "We're both engineering-driven companies with investments in ASIC and I/O technologies. Eurotherm provides Action with European sales channels; Action provides the same for Eurotherm in the U.S. I'm committed to building this into a $500 million company in three years."
Why did Mr. Pinto, a well-known automation industry pundit, choose to stake his company's future on Eurotherm? Answers Jim, "When all else fails in a plant, the temperature controllers must keep working. With 350,000 shipments per year, Eurotherm owns the market for autonomous, self-acting, front-end temperature controllers. That's where I'm pitching my tent."
Billed as a "marketing channel and customer acquisition," the second recent British invasion was the Siebe plc purchase of Wonderware Corp. The Berkshire, U.K.-based Siebe, an almost $5 billion engineering and electronics conglomerate, announced Feb. 24 its intention to acquire Wonderware for a hefty $24 per share cash offer, or about $375 million. Wonderware, which develops Microsoft Windows-based factory automation software, posted 1997 revenues of $82.5 million.
In the deal, Wonderware will become part of Siebe Control Systems, which now includes Foxboro, Barber-Colman, Triconex, and APV. Company executives, however, promise that Wonderware will not be "Siebe-ized."
Siebe ceo, Allen Yurko, and Control Systems Div. president and coo, George Sarney, assured industry press and analysts that Wonderware will maintain its own brand image as a free-standing business in Siebe. Says Mr. Sarney, "Siebe views HMI [human-machine interface] as a major market segment. This acquisition extends the operating range of Foxboro's I/A Series systems and its market segments."
Behind product, technology, and market synergies between the two companies stands the question—how will Wonderware and its distributors be treated by Siebe? In the short term, employees will be paid handsomely for their equity positions. For the future, the answer remains unclear. Siebe has a reputation for trimming costs and "redundancies."
Since its inception in 1987, Wonderware has excelled in two major areas. Its forebearers shared a passion for automation software and Microsoft platforms. Company founders leveraged this vision throughout a strong, international distributor network, which in turn built a loyal customer base.
Many of our readers were first introduced to the concept of using Windows-based software on the plant floor by these early Wonderware pioneers. Can the passion stay alive through this acquisition?
Unlike the British invasion of the colonies in the 1770s, let's hope that Siebe will respect and nurture the spirit that is Wonderware in the 1990s. For it's that passion, common to so many ingenious companies in this industry, that breeds innovation.
Jane S. Gerold, Editorial Director firstname.lastname@example.org