M+W says a lack of synergies with its engineering and construction business drove the decision to sell its automation divison to ATS for €255m ($348m).
The Canada-headquartered firm Automation Tooling Systems (ATS) announced today it was buying M+W’s Process Automation and ProFocus businesses - which contributed approximately €170m to the firm’s overall revenue of €2.6bn in 2013 – and expects the acquisition to go through by the end of September.
Whilst the majority of revenue in the division comes from the automotive industry, 26% of sales come from the chemicals industry and a further 13% from pharma and biotech. According to spokesman Michael Gemeinhardt, the decision to sell was to allow M+W to focus on its high-tech engineering and construction of infrastructure businesses.
He told in-Pharmatechnologist.com the “the automation business – focusing on software development for the control and visualization of critical production processes – has little synergies with our core business,” and therefore the German firm decided to divest.
Teh acquisition include a workforce of 1,000 - including approximately 750 engineers - with 51 locations situated in 16 countries. ATS said in a statement it intends to “enhance its portfolio, serve existing M+W and ATS customers and build new customer relationships.”
As for existing customers, Gemeinhardt told us “current projects will of course be executed,” adding a “contract is a contract.”
Automation processes such as production management software and analytics software help consolidate manufacturing operations and standardise applications across a business, and thus can help pharma companies cut the time to commercialisation and lower costs.
According to the Measurement, Control & Automation Association’s (MCAA) quarterly Industry Group Report (IGR) survey released last month, bookings received by member firms are growing at an annual rate of 8%.
However, the bookings received from pharma firms rose by 35.4% over the past quarter, the survey reported, making the sector the greatest significance to MCAA member firms.
A 2012 report by the ARC Advisory Group added pharma and biotech firms will continue to up their expenditure on automation hrough to 2016, due to the “adapt or die” environment amongst drugmakers.