Emerson (EMR) Buys Mita-Teknik, Adds to Automation Solutions
Emerson (EMR) acquires Denmark-based Mita-Teknik and adds it to the Automation Solutions segment. The buyout enhances its presence in the wind energy market.
Emerson Electric Co. EMR yesterday announced that it acquired the control automation solutions provider Mita-Teknik. The buyout was accomplished through an all-cash transaction. The financial terms of the acquisition have not been disclosed by Emerson.
Shares of Emerson gained 1.25% yesterday, ending the trading session at $93.89.
Denmark-based Mita-Teknik provides wind solutions, industrial automation, and digital solutions. Among its offerings are wind park control, turbine control, communication networks, pitch control, grid connections and others. Its global installed base is >60,000 systems. Mita-Teknik was founded in 1969.
Inside the Headlines
The solutions provided by Mita-Teknik helps in managing operations of wind turbines and optimizing outputs of wind farms. This subsequently enables maximizing the production of energy and lowering costs. The buyout will add new vigor to the exiting control system business of Emerson.
Mita-Teknik’s aftermarket services, related to the enhancement of energy production (annual) and retrofit solutions, will be added benefits for Emerson. Overall, the buyout will help Emerson expand its presence in the renewable energy (wind) market.
Mita-Teknik will be part of Emerson’s Automation Solutions segment. The division engages in providing valves, measurement and analytical instrumentation, actuators and regulators, process control systems and solutions, and industrial solutions. The segment’s revenues in fourth-quarter fiscal 2021 (ended September 2021) were $3,178 million, reflecting growth of 5.8% from the year-ago quarter. It represented 64.2% of Emerson’s total revenues in fourth-quarter fiscal 2021.
Emerson’s Buyout Activities
The company believes in acquiring businesses to improve its product lines and market exposure. In fiscal 2021 (ended September 2021), it used $1,611 million for making acquisitions. Its sales in the fiscal year advanced 1% year over year on the back of synergistic gains from acquired assets.
Emerson expanded the business of its Automation Solutions segment with the acquisition of Open Systems International, Inc. Also, Emerson’s acquisition of Progea has been aiding its business in the control and embedded software space. The 7AC Technologies, Inc. buyout has been boosting the growth prospects of Emerson’s Commercial and Residential Solutions segment. All these buyouts were accomplished in fiscal 2021.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $55.2 billion, Emerson currently carries a Zacks Rank #2 (Buy). The company is likely to benefit from strengthening end markets, including cold chain, and food and beverage, as well as acquired assets and efficient capital deployment policies. Supply-chain woes, inflation in raw material costs and logistic issues are concerning.
In the past three months, the company’s shares have lost 0.8% against the industry’s growth of 6.9%.
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The Zacks Consensus Estimate for Emerson’s earnings has been raised by 7.2% to $4.92 for fiscal 2022 (ending September 2022) and 5.8% to $5.31 for fiscal 2023 (ending September 2023) in the past 60 days. Also, the consensus estimate for the first quarter of fiscal 2022 (ending December 2021) grew 3.1% to $1.00 per share.
Emerson Electric Co. Price and Consensus
Other Stocks That Warrant a Look
Three other top-ranked stocks in the industry are discussed below.
SPX FLOW, Inc. FLOW presently sports a Zacks Rank #1 (Strong Buy). FLOW’s shares have gained 11.6% in the past three months.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for SPX FLOW’s earnings has increased 8.4% for 2021 and 23.5% for 2022. The last reported quarter’s earnings surprise for FLOW was 14.49%.
A. O. Smith Corporation AOS presently carries a Zacks Rank #2. Shares of AOS have gained 22.1% in the past three months.
The Zacks Consensus Estimate for A. O. Smith’s earnings has increased 6.6% for 2021 and 9.3% for 2022 in the past 60 days. AOS’ earnings surprise in the last reported quarter was 30%.
Franklin Electric Co. FELE presently carries a Zacks Rank #2. FELE’s shares have gained 12.6% in the past three months.
In the past 60 days, the Zacks Consensus Estimate for Franklin Electric’s earnings has increased 1% for 2021 and 1.5% for 2022. The last reported quarter’s earnings surprise for FELE was 6.52%.
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