Yokogawa expands intoTurkey

Yokogawa Electric Corporation has announced that its subsidiary, Yokogawa Europe BV has acquired 100% of the shares of its distributor in Turkey, Birleşik Endüstriyel Sistemler Ve Tesisler AS (BEST), which is based in Izmir. Yokogawa sees this as a major step forward into the emerging market in Turkey and the associated area. The acquisition of shares was carried out on November 25.

With this acquisition, Yokogawa is strengthening its focus on Turkey as a market with substantial growth potential. It will allow Yokogawa to extend its position in several promising segments, such as the power industry. Through the acquisition, Yokogawa will also enhance its relationships with customers in Turkey.

“BEST has been Yokogawa’s distributor since 1977 and has already built an excellent reputation in the oil and gas industries, where it will continue to provide great value to customers,” comments Yokogawa Europe’s president Herman van den Berg: “Yokogawa is committed to working with customers as partners to help them get maximum value from their plant operations, and this acquisition is a major step forward in our plans to grow our footprint in emerging markets, and specifically in target industries including the power and energy sectors.”

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Honeywell To Acquire Elster

Honeywell announced in July 2015 that it has signed an agreement to acquire the Elster Division of Melrose Industries plc, a leading provider of thermal gas solutions for commercial, industrial, and residential heating systems and gas, water, and electricity meters, including smart meters and software and data analytics solutions, for approximately $5.1Bn.  The Honeywell corporate release continued as follows:

Elster also manufactures flow computers and regulators for the gas industry.  Elster consensus sales for 2015 are estimated to be $1.8Bn.  The price translates to approximately 12.6 times Elster’s estimated 2015 consensus earnings before interest, taxes, depreciation, and amortization (EBITDA) – [so this is around $400m – Ed] – and the acquisition is anticipated to occur in the first quarter of 2016. The agreement is subject to customary closing conditions, including regulatory review and Melrose shareowner vote.

“The acquisition of Elster will generate strong future returns for Honeywell’s shareowners because it increases our growth profile globally – creating both organic and inorganic growth opportunities – and because Honeywell can run this company effectively and accelerate its growth through our complementary technologies, software knowledge, and presence in High Growth Regions,” said Honeywell Chairman and CEO Dave Cote.  “Elster has outstanding technologies, brands, energy efficiency know-how, and global presence, all of which we are very well-positioned to build on.  Elster also creates a new platform for acquisition targets for Honeywell that will be additive to the business’ growth and global presence.  We will see immediate benefits to Honeywell’s portfolio, accelerating into 2016 and 2017. This is a great acquisition for Honeywell and our shareowners.”

“The Elster acquisition proves that we are staying true to our disciplined M&A approach and integration processes because it’s a model that has worked very well for us,” said Cote.  “During the past decade, we have completed more than 80 acquisitions adding approximately $12Bn in revenues.  We will continue to look for good acquisitions to enhance our growth profile.  We see Elster as a great opportunity to deploy our operating model and key process initiatives to grow the business, enhance our position globally, and drive significant returns to shareowners over the long-term. The Honeywell Operating System (HOS) will be a major factor in creating new synergies that will increase the growth and profitability of each of Elster’s businesses.”

Elster employs approximately 6,800 people with major locations in the United States, Germany, the United Kingdom, and Slovakia.  The company maintains an impressive installed base with more than 200 million metering modules deployed over the course of the last 10 years alone.

“This acquisition will allow us to improve customer value with technologies and lifecycle management solutions for industrial end users served by Honeywell’s Environmental Combustion and Controls and Process Solutions businesses,” continued Cote. “Elster’s gas business offers products in high demand among natural gas customers and brings a strong, global distribution network and numerous cross-selling opportunities for existing Honeywell technologies to new customers in both developed and High Growth Regions.”

“Elster’s gas, electric, and water meters are highly valued for their reliability, safety, and accuracy.  Elster has a world-class reputation for delivering on the operational efficiency and regulatory certification requirements of utility customers globally.  We expect that energy efficiency initiatives and mandates and the increased need for natural resource management will drive meaningful and sustained growth for Honeywell in the metering segment.  Utility metering in particular is rapidly evolving as new ‘smart’ technologies and software and data analytics capabilities are becoming adopted around the world and we expect strong growth from this segment globally.  Elster’s differentiated technologies, extensive industry expertise, and relationship with utility customers globally – combined with their strong positions in the highly regulated heating, controls, and metering segments – are a great fit for Honeywell’s portfolio,” concluded Cote.

There is no change to the 2015 full year guidance Honeywell provided in its second quarter earnings release.  Honeywell expects that the dilutive impact of the transaction on its 2016 Earnings Per Share to be minor.

Added on December 30, 2015:

Honeywell completed this acquisition on 29 December 2015, and advised how the businesses will be moulded into the Honeywell corporate structure……

Elster’s water and electricity metering business, along with part of its gas business, will become part of Honeywell’s Environmental & Energy Solutions (E&ES), a global business that produces residential and commercial building controls that help keep millions of homes, commercial buildings and industrial facilities comfortable and energy efficient. E&ES is a business unit of the Honeywell Automation and Control Systems division.

Elster’s upstream and midstream gas applications businesses will be integrated with Honeywell Process Solutions, within Honeywell Performance Materials and Technologies. Elster’s products and technologies complement the strong HPS position in the natural gas sector. The new expanded line of HPS products will include ultrasonic and turbine meters, electronic volume correctors,  gas chromatographs, flow computers, regulators and pressure reducing stations for the gas transmission and distribution industry.

ICT acquires Raster in Holland

In The Netherlands, ICT Automatisering is an independent provider of industrial automation services employing over 700 automation professionals. Established 37 years ago, they were known as Humiq BV until 2012. Sales in 2014 were Euro 63m, with profits around Euro5m. ICT has now acquired Raster IA BV, a major Dutch systems integrator in the field of industrial process automation.

Raster describe their activities as production automation, software development and consultancy, delivering these services to multinationals and Dutch companies in the offshore oil and gas, heavy lifting, chemicals, pharmaceuticals and defence sectors. They are accustomed to working with ISA-88, ISA-95, Safety, Gamp, SIL, OEE / SPC and tracking and tracing, and staff are experienced in the safety issues needed by various industries, including TÜV Functional Safety, VCA, NEN 3140, Basic Offshore Safety and Emergency Response Training. Raster also act as an importer and distributor in Holland for products from suppliers such as eWon, Softing, Prosoft Technology, Zigbee (4-noks) and Korenix.

This acquisition marks a significant step forward in the growth strategy of ICT, expanding the ICT Industrial Automation activities, and making a strong platform for continued partnerships with their existing software vendors such as Schneider Electric, Siemens and Rockwell Automation.

Schlumberger buys Cameron

A Schlumberger announcement at the end of August advised:

Schlumberger and Cameron have jointly announced a definitive merger agreement in which the companies will combine in a stock and cash transaction, unanimously approved by the boards of directors of both companies.

Cameron shareholders will receive 0.716 shares of Schlumberger common stock and a cash payment of $14.44 in exchange for each Cameron share: based on the closing stock prices of both companies on August 25, 2015, the agreement places a value of $66.36 on each Cameron share, representing a 37% premium to Cameron’s 20-day volume weighted average price of $48.45 per share, and a 56.3% premium to Cameron’s most recent closing stock price of $42.47 per share. On closing, Cameron shareholders will own approximately 10% of Schlumberger’s outstanding shares of common stock.

Schlumberger expects to realize pretax synergies of approximately $300m and $600m in the first and second year, respectively. Initially, the synergies are primarily related to reducing operating costs, streamlining supply chains, and improving manufacturing processes, with a growing component of revenue synergies in the second year and beyond. Schlumberger also expects the combination to be accretive to earnings per share by the end of the first year after closing.

The transaction combines two complementary technology portfolios into a “pore-to-pipeline” products and services offering to the global oil and gas industry. On a pro forma basis, the combined company had 2014 revenues of $59Bn.

Paal Kibsgaard, Chairman and Chief Executive Officer of Schlumberger remarked, “This agreement with Cameron opens new and broader opportunities for Schlumberger. At our investor conference in June 2014, we highlighted how the E&P industry must transform to deliver increased performance at a time of range-bound commodity prices. With oil prices now at lower levels, oilfield services companies that deliver innovative technology and greater integration while improving efficiency, which our customers increasingly demand, will outperform the market.

“We believe that the next industry technical breakthrough will be achieved through integration of Schlumberger’s reservoir and well technologies with Cameron’s leadership in surface, drilling, processing and flow control technologies. Deep reservoir knowledge further enabled by instrumentation, software and automation, will launch a new era of complete drilling and production system performance.

“In addition, we will achieve significant efficiency gains through lowering operating costs, streamlining supply chains, and improving manufacturing processes while leveraging the Schlumberger transformation platform. We look forward to welcoming the talented employees of Cameron and are pleased that they will be joining the Schlumberger team as our fourth product group.”

Jack Moore, Chairman and Chief Executive Officer of Cameron, added, “This exciting transaction builds on our successful partnership with Schlumberger on OneSubsea and will position Cameron for its next phase of growth. For our shareholders, this combination provides significant value, while also enabling them to own a meaningful share of Schlumberger. Together, we will create a premier oilfield equipment and service company with an integrated and expanded platform to drive accelerated growth.

“By bringing together Cameron and Schlumberger, we will be uniting two great companies with successful track records, performance and value creation.  We look forward to working closely with Schlumberger to achieve a seamless post-closing integration and long term value for all of our stakeholders.”

The transaction is subject to Cameron shareholders’ approval, regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur in the first quarter of 2016.

Schlumberger, Cameron and OneSubsea, their joint venture company, all attended OE2015 in Aberdeen this week, independently.

Emerson acquires Spectrex

Emerson Process Management has announced the acquisition of Spectrex Inc, a leading US-based manufacturer of flame and open path gas detectors. With this addition, Emerson will have the most comprehensive line of flame, gas and ultrasonic leak detector solutions used for safety monitoring in the industry.

Spectrex will join the Rosemount portfolio of measurement and analytical technologies, joining the capabilities already available with the gas leak detection systems acquired in Groveley Detection (nickdenbow.wordpress.com/2013/06/24/1345/) in June 2013.

For nearly 34 years, Spectrex has been the leader in flame and open path gas detection. It developed the world’s first ultraviolet-infrared (UV/IR) and triple infrared (IR3) flame detectors and was first to introduce xenon flash lamps in open path detector design, increasing detectors’ resilience to atmospheric conditions while reducing power consumption. These innovative advancements in safety monitoring provide a powerful solution for customers in the oil and gas, petrochemical, chemical and power industries.

“We are very excited about adding the Spectrex product line to our flame and gas detection portfolio,” said Tom Moser, group vice president of Emerson Process Management’s measurement and analytical technologies. “Emerson is committed to helping our customers protect their employees, facilities, and the environment, and we are now better positioned to serve that need.”

Spectrex and its staff are located in Cedar Grove, New Jersey, with sales and technical support offices in Houston, the United Kingdom and Taiwan.

Editor’s note: I tried to launch the UK sales of the first UV/IR detection system ever developed (so I was told at the time) which was made by Armtec in New Hampshire. That was in about 1983. Maybe Spectrex bought up Armtec? All inputs will be welcomed!

E+H expands into Colombia

After two decades serving the Colombian market, Endress+Hauser is acquiring 100 percent of its longtime sales and service partner in Bogotà, the process automation business of Colsein Ltda.

“We believe Colombia represents a market with great potential for further growth,” explains Michael Ziesemer, Chief Operating Officer of the Endress+Hauser Group. To date, the Swiss measurement and process automation specialist has been represented by local partner Colsein Ltda, whose portfolio includes a wide range of services such as calibration, maintenance and engineering, in addition to its sales activities.

To gain additional market share and fortify the Endress+Hauser brand even further in the country, Colsein’s process automation business will be transferred to a new Endress+Hauser sales subsidiary on 1 January 2016. The company will continue to maintain its headquarters in the capital city of Bogotà. Gabriel Navas, founder and managing director of Colsein, will continue as a member of the board.

A committed team
Of Colsein’s roughly 250 employees, nearly a third work in the process automation business. The company has represented Endress+Hauser in Colombia since 1993, successfully managing both domestic and international customers. “We’re pleased that we can rely on a skilled team of employees in Colombia who have worked hard to establish the Endress+Hauser brand in the country,” says Michael Ziesemer who adds: “This is a foundation we can build on.”

With a population of almost 50 million, Colombia is one of South America’s most populated countries, second only to Brazil. After Chile, it is considered the continent’s largest growth market. Although the oil and gas industry is the main driver of economic development, state-of-the-art measurement and automation technology is also helping to make process technologies efficient, safe and environmentally compatible in the food & beverage, water & wastewater and power & energy industries.

GasSecure sold to Dräger

The Norwegian venture‐backed company GasSecure AS has been sold to Dräger Holding International GmbH for approximately 500 mNOK ($61m). The company will strengthen Dräger’s portfolio within gas detection, with the newly developed wireless gas detector for the oil and gas industry. The sale is the proof of GasSecure’s success both in the market and as a venture backed investment.

Stefan Dräger, Executive Board Chairman of Dräger, and Knut Sandven, CEO of GasSecure

Stefan Dräger, Executive Board Chairman of Dräger,
and Knut Sandven, CEO of GasSecure

GasSecure was founded by Knut Sandven and SINTEF in 2008, based on core technology from SINTEF, with R&D Director Håkon Sagberg joining the company in 2009, and has been financially supported by Viking Venture, Investinor, ProVenture Seed and SINTEF since 2010.

Chairman of the Board, Eivind Bergsmyr from lead investor Viking Venture commented: ‐ “Dräger is in our opinion the ideal buyer for GasSecure. They have the capability and distribution power to scale the unique and promising products of GasSecure with their worldwide distribution network. Dräger understands how to develop an innovative company further and has been willing to offer a competitive price acknowledging the outstanding achievements”.

Continues as a separate company

Dräger will continue to keep GasSecure with its 11 employees as a separate company under the leadership of founder and CEO, Knut Sandven: “We are truly impressed by Mr Sandven and his team and what they have achieved so far, and want to make sure we integrate this capability into the Dräger organization in a tailored and effective way”, says Dräger Executive Vice President M&A, Brigitte Dautzenberg. GasSecure’s products and technology are successfully field proven in the harshest offshore environments and climates from Alaska, the North Sea and Australia being bought by major global operators. The GasSecure product offering provides extended detection coverage, exceptional safety and cost performance to operators. This has become even more important with the current cost focus in the oil sector.

Natural next step

GasSecure CEO Knut Sandven commented on the change in ownership as a natural step in expanding the GasSecure influence and success further:‐ “Growing a startup from first concept to a successful company with global reach means going through different phases. The venture companies were perfect owners in the startup phase with their continuous support, commitment and experience. Now it is all about distribution, support and scaling where a prime industrial brand such as Dräger is the best partner we could ever imagine. This is a huge recognition of our innovative technology, the GasSecure team, and our vision for new, revolutionary products”.

GasSecure has been regularly featured in the INSIDER Newsletter, since the first mention of their novel wireless hydrocarbon gas detector at an Invensys OpsManage meeting back in 2011. Last mention was in July 2014, when a deal was announced with Yokogawa for joint marketing of ISA100 wireless systems using the GasSecure gas detectors.