Spectris snaps up Omega Engineering for $475m

This report was first published in the Industrial Automation INSIDER for September 2011.

Spectris, the UK based instrumentation and controls conglomerate, the holding company for Malvern Instruments, Brüel and Kjær, HBM, Servomex, Microscan, N-Tron and Red Lion, to mention a few, has expanded radically with its largest acquisition to date, purchasing Omega Engineering for $475m. Omega Engineering will add around 10% to the Spectris group turnover and staff numbers. The Spectris Group is described in more detail in a May 2008 report on UK conglomerates on the INSIDER blog (1).

Omega Engineering was formed in 1962 by Betty Ruth Hollander, in her home in Stamford, Connecticut, supplying temperature measurement and control products. The business has remained family owned and managed, offering a broad range of process measurement and control instrumentation to customers in industrial and academic markets, which are sold directly to end users in these sectors via catalogue, telephone and internet. Omega has a differentiated customer service model with emphasis on providing high levels of service, quality, availability, customisation and speed of delivery, and has achieved very high levels of repeat business.

Current results

Omega has five manufacturing and two distribution/sales facilities, and employs around 700 people, achieving sales of $168m in 2010, with adjusted operating profit before interest and tax of $39.6m. Sales are concentrated 80% in North America, with 10% in Europe: best known manufactured brands are Omega and Newport, but many other manufacturers supply products for the ubiquitous Omega catalogues, including Red Lion Controls, from within Spectris.

Betty Hollander passed away earlier this year at the age of 81, leaving her husband and four children: as founder, ceo and chairwoman of Omega she had become known as one of the world’s leading female entrepreneurs and industrialists, but had always listed her main occupation as “wife and mother”. Under her leadership, Omega had successfully migrated from the catalogue sales route to the web, with 90% of customers using the websites, and 34% of orders placed via the web. The customer base is very diverse, and average order value low, but there is strong long term customer loyalty, with 89 of the top 100 customers being established for over 10 years.

John O’Higgins, chief executive of Spectris (2), commented: “We are delighted to have reached agreement to acquire the Omega Engineering business, which will bring a significant strategic growth platform to Spectris. Omega will continue to serve its customers with innovative products and outstanding service. With its focus on control of temperature, pressure, flow and other common industrial process measurements, Omega is a natural fit for our industrial controls segment and enables us to expand our product offering to customers globally.”

H1 2011 Results at Spectris

Spectris operates across four business segments, which reflect the applications and industries it serves: Materials Analysis, Test and Measurement, In-line Instrumentation and Industrial Controls. In reporting the 2011 H1 results for Spectris, O’Higgins highlighted that the industrial controls segment represented only 8% of total sales: by adding Omega alongside Red Lion (operator interfaces, protocol converters, panel meters, signal conditioners, plus N-Tron Ethernet switches) and Microscan (track, trace and control solutions using machine vision, lighting, RFID and barcode reading) the controls segment will grow to 15-20% of group business, and can benefit from geographical expansion.

In 2011 H1 Spectris group sales were GBP507m ($820m), up 21% for existing businesses YOY, or 25% after including acquisitions; and operating profit was GBP81.5m ($132m), up 63%, and achieving 16% of sales: R+D investment has been maintained at the target level of approx 7% of sales. The materials analysis segment had performed well in metals and mining, notably with the Epsilon 3 benchtop X-ray fluorescence spectrometer in mining, cement and petroleum applications: academic markets were strong, particularly in emerging economies. Another new product is the Facility Pro environmental monitoring system, unique in combining both biological and particle contamination monitoring on a single platform for monitoring clean-rooms in pharmaceutical production areas: the whole pharmaceutical market held up well for Spectris through the last recession.

From wind turbines to paper production

Test and measurement (Brüel and Kjær) performed well, with growth in noise monitoring in the mining and construction industry, with a new market opening up monitoring wind turbine noise in the power industry. In-line instrumentation had performed well in the paper and tissue industries, particularly in China, with BTG producing a new zeta potential analyser for pulp and paper producers, after some development collaboration with Malvern Instruments.

Geographical spread

Geographically Spectris saw Asia-Pacific sales grow strongly, at 21%, overall, 39% in China, making this the second largest regional market, almost on a par with Europe. There was also strong growth in Latin America, particularly Brazil, where sales increased almost 30%: a new facility has been established in Sao Paulo with applications laboratories and training rooms. Sales growth in North America was strong at 26% YOY at constant exchange rates.


  1. For more information on Spectris see the May 2008 report on UK conglomerates in this INSIDER blog, www.iainsider.com. See https://nickdenbow.wordpress.com/2008/05/14/conglomerates-corporate-style-halma-spectris/
  2. O’Higgins joined Spectris in 2006, from Honeywell, where on Linked-in he quotes that he was president of automation and control solutions, Asia Pacific region.