ABB announces acquisition of B&R Automation | Automation.com

ABB announces acquisition of B&R Automation

ABB announces acquisition of B&R Automation

April 5, 2017 - ABB announced the acquisition of B&R, an independent provider focused on product- and software- based, open-architecture solutions for machine and factory automation worldwide. B&R, founded in 1979 by Erwin Bernecker and Josef Rainer is headquartered in Eggelsberg, Austria, employs more than 3,000 people, including about 1,000 R&D and application engineers. It operates across 70 countries, generating sales of more than $600 million (2015/16) in the $20 billion machine and factory automation market segment. The combination is intended to result in a comprehensive offering for customers of industrial automation, by pairing B&R's products, software and solutions for modern machine and factory automation with ABB’s offering in robotics, process automation, digitalization and electrification.

Through the acquisition, ABB expands its leadership in industrial automation and will be uniquely positioned to seize growth opportunities resulting from the Fourth Industrial Revolution. In addition, ABB takes a major step in expanding its digital offering by combining its portfolio of digital solutions, ABB Ability, with B&R's application and software platforms, its large installed base, customer access and tailored automation solutions.

With the acquisition, ABB will expand its industrial automation offering by integrating B&R's  products in PLC, Industrial PCs and servo motion as well as its software and solution suite. ABB will offer its customers an open-architecture automation portfolio.

B&R has grown successfully with a revenue CAGR of 11 % over the last two decades. Revenues more than quintupled since 2000 to more than $600 million (2015/16). The company has a global customer base of more than 4,000 machine manufacturers, a track record in automation software and solutions and application expertise for customers in the machine and factory automation market segment.

Both companies have complementary portfolios. ABB is a provider of solutions serving customers in utilities, industry and transport & infrastructure. B&R is a solution provider in the automation of machines and factories for industries such as plastics, packaging, food and beverage. The joint commitment to open architecture increases customer choice and flexibility facilitating connectivity in increasingly digitalized industries.

Innovation is at the heart of both companies. B&R invests more than 10 percent of its sales in R&D and employs more than 1,000 people in R&D and application engineering. ABB spends $1.5 billion annually on R&D and employs some 30,000 technologists and engineering specialists. Going forward, ABB and B&R will continue to invest considerably in R&D. 

Automation of machines and factories is a key driver of the Fourth Industrial Revolution and the IoT. ABB will continue B&R's solution-based business model and build on its domain expertise to develop new software-based services and solutions for end-to-end digitalization.

On closing of the transaction, B&R will become part of ABB’s Industrial Automation division as a global business unit – Machine & Factory Automation – headed by the current Managing Director, Hans Wimmer. Both companies consider B&R's management and employees as a key driver of future growth and the business integration together with their counterparts from ABB. The co-founders of B&R, Erwin Bernecker and Josef Rainer, will act as advisors during the integration phase to ensure continuity. B&R's headquarters in Eggelsberg will become ABB’s global center for machine and factory automation.

With this acquisition, ABB becomes the largest industrial automation player in Austria. ABB has operated in Austria for more than 100 years. With the future role B&R and its headquarters in Austria will play, as part of ABB, Austria, particularly Upper Austria, will benefit. The planned expansion of the R&D and production activities in Eggelsberg and Gilgenberg will strengthen Austria’s high-tech industrial landscape.

The transaction multiple is in line with peer valuations. The parties agreed not to disclose the purchase price. ABB will finance the acquisition in cash. The transaction is expected to be operationally EPS accretive in the first year, and is expected to add significant synergies of about 8% of B&R's stand-alone revenue in year four. The transaction is expected to close in summer 2017, subject to customary regulatory clearances.

ABB is a pioneering technology leader in electrification products, robotics and motion, industrial automation and power grids, serving customers in utilities, industry and transport & infrastructure globally. Continuing more than a 125-year history of innovation, ABB is writing the future of industrial digitalization and driving the Energy and Fourth Industrial Revolutions. ABB operates in more than 100 countries with about 132,000 employees. 

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