May 17, 2000 - Connections for Growth & Success™

Here is the second eNewsletter to which you have subscribed recently. I hope you will enjoy it, and give me some feedback to help make it better.

Fairey acquires Spectris

(Thank you, Dave Ness, Hardy Instruments, for alerting me on this!)
Fairey Group PLC is a UK-based mini-conglomerate that has been buying US and other businesses regularly - mostly small companies like Ircon, RedLion, Luxtron, NDS, etc. Process Instrumentation is about two-thirds of the group. Sales have been flat at about $425m, which of course affects their stock price.

Now, in a bold move, Fairey is acquiring Spectris AG - at about $ 400m sales this is big for Fairey. The acquisition price is about $200m (0.5 times sales, which is low) and hopefully "accretive" - at a valuation that helps Fairey, which needed needed a big acquisition to show some growth. Spectris is the biggest one they've made yet and we'll need to see how they digest it.

Spectris manufactures instruments, systems and controls, with HQ in Langen, Germany. Spectris itself had previously acquired B&K (test & measurement), HBM (load-cells) and BTG (paper & pulp sensors) - these will probably be split off and run separately, which is the Fairey MO.

See the Fairey press release on Spectris Fairey Press Release on Spectris

Danaher Acquisition - what next ?

Following news of the two Danaher acquisitions, a subscriber asked :

    "With all the recent acquisitions made by the Danaher Corporation, how do you see them handling the overlap of products and technology, especially Kollmorgen, Pac Sci, API, Warner, Atlas Copco? Do you believe there will be a considerable amount of consolidation? As I can see, the recent acquisitions of Kollmorgen and Warner appears to be a way for Danaher to gain market share and expand their distribution network, more than gain new technology."

Here is my response :

You're right on - these acquisitions are "to gain market share and expand distribution" - not for new technology. Danaher is a Manufacturing-orientated organization, and they'll provide manufacturing quality and cost improvements. In my opinion, the overlaps will be measured, and simply consolidated or divested.

In a relatively flat marketplace, the name of the game for the big names, with their stock traded on a major exchange, is to grow through acquisition, without diluting profit percentage.

Look at the Danaher press releaseCheck out the Danaher press release
Go to the article The Changing Face of Automation Go to the article : Chanmging Face of Automation

Disintermediation I & II

ISA InTech published my Disintermediation article on the back page this month (May 2000) : When do you make the change?

Look at the ISA article Check out the InTech article

I've had a lottt of response.

The subject of Disintermediation came up at ISA/99 in Philadelphia, where a horde of Reps and Distributors stood frozen, "like deer in the headlights". There is very little material on Disintermediation which helps, specifically in the industrial automation biz. Take a look at my two articles :

For sales channels : Disintermediation-I for sales people
Disintermediation-II for end-users : For end-users

Feedback :
Here is what Tom O'Leary, Central California Instruments, said :

    "The true entrepreneur, will, with a carefully planned course of action, not only survive, but very likely excel in various niches or mainstream venues. The challenge is certainly there, and this old goat is definitely pumped up and primed for an exciting voyage to "where no man has gone before".

Thank you for your positive and motivating response, Tom!

Automation List - 'Open' Systems Poll

Ken Crater, founder of the Automation List writes : This poll was up on the site for a number of days and accumulated an interesting response -- it seems that there's a pretty wide variation in the definition of "open" as it relates to controls. The question posed was simple:

"Open" means...

13 (12.62%) whatever Marketing wants it to mean.
25 (24.27%) the protocol is published and free to replicate.
1 (0.97%) the hardware is ISA bus, CompactPCI, PC/104, etc.
20 (19.42%) the software is open source.
25 (24.27%) 2-4 above.
19 (18.45%) all of the above.

Ken's Note: "all of the above" was sort of a perverse choice that a number of people seem to think reflects the current reality. It'd be nice if "open" could begin to mean something again.

There will be a new poll up in a couple of days, if you want to get your votes in go to : The website Go to the Control Tectnology website

Contact Ken Crater at :

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How often to publish this eNewsletter?
  • Most people said : As often as you have something interesting.
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Tell you what - we'll start with : "as often as you have something".
Your feedback will make a difference.

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