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24 May, 2018

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Emerson buys Aventics for €527m, to create $1.5bn giant

17 May, 2018

Emerson is buying Bosch Rexroth’s former pneumatics business, now known as Aventics, for €527m in cash from its current owner, the German-Scandinavian investor, Triton, which acquired it for around €200m in 2013. Emerson says that the deal will create a $1.5bn business, significantly expanding its reach in the $13bn market for smart pneumatics for machine and factory automation applications.

“Aventics brings technologies, capabilities and expertise that are critical to digitalisation of manufacturing, including predictive maintenance through integrated diagnostics – an important priority for our Automation Solutions business,” says Emerson's Mike Train, executive president of this business.

“With Aventics, we will gain a valuable footprint in Germany, a key market for automation technology and investment,” he adds. “Aventics also brings opportunities for Emerson to better serve customers in hybrid markets like food and beverage, providing intelligent devices and solutions from processing through packaging.”

“Triton has been the owner of Aventics for more than four years and we view this as an appropriate time for a long-term industrial owner to continue the development of Aventics,” comments Peder Prahl, director of the general partner to the Triton fund. “Emerson is an ideal partner for Aventics going forward with an ideal cultural fit. This partnership will open new opportunities for both companies.”

Headquartered in Luxembourg, with its main office in Laatzen, Germany, Aventics has about 2,100 employees worldwide, with five manufacturing locations and sales worth $425m in 2017. When Bosch Rexroth sold the business to Triton in 2013, it said the deal would allow it to explore long-term growth opportunities outside the factory automation sector.

Aventics will complement Emerson’s existing Asco Numatics and Joucomatic brands. Emerson predicts that the expanded offering will create one of the broadest portfolios of fluid control and pneumatic devices that incorporate sensing and monitoring capabilities to improve system uptime and performance, enhance safety and optimise energy usage. It adds that Aventics will build on and strengthen its capabilities in key discrete and hybrid automation markets, including food and beverage, packaging, automotive assembly and medical equipment.

“We will now offer the industry's widest range of fluid automation products and solutions with unmatched delivery, reliability and performance,” says Emerson’s chairman and CEO, David Farr. “This acquisition adds another strong, complementary technology portfolio into the Emerson family, creating value for our customers and more opportunities for growth.

There will be some overlaps between Emerson's existing Asco Numatics and Joucomatic brands, and the newly acquired Aventics portfolio

“With the addition of Aventics’ expertise, Emerson is positioned to be the most capable global company when it comes to fluid automation technologies,” he adds.

Some 37% of Aventics’ business comes from Germany, with a similar figure from the rest of Europe. Half of Emerson’s fluid and motion control business comes from the Americas, with just 6% from Germany and 24% from the rest of Europe. The combined business will derive 39% of its revenues from the Americas, 16% from Germany, 28% from the rest of Europe, and 17% from the Asia-Pacific region.

Two thirds of Aventics’ business comes from the discrete sector, 23% from the industrial sector and 11% from the hybrid sector. Emerson derives 35% from the industrial sector, 34% form the process/hybrid sector, and 24% from the discrete sector. The combined business is expected to have 37% of its business in the discrete sector, 31% in the industrial sector, and 27% in the process/hybrid sector.

Emerson expects the combined business to expand 1% faster than the market growth rate of 3–5%, driven by cross-selling. It predicts that margins will expand by more than 5%.

The acquisition is expected to close in the fourth quarter of 2018 subject to regulatory approvals, Aventics’ necessary consultations and other customary closing conditions.




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