BUSINESS NEWS | COMING EVENTS | PEOPLE NEWS | MERGERS 2012 INDUSTRIAL MANUFACTURING M&A VALUE SURPASSES 2011 LEVELS NEW YORK—Amid high uncertainty over the direction of the global economy, the fourth quarter of 2012 saw a slowdown in the number of announced industrial manufacturing transactions. However, despite the reduction in merger and acquisition (M&A) activity during the last quarter, 2012 proved to be a favorable year for deal making in the industrial manufacturing space. Year over year, the total number of transactions decreased slightly from 2011 but the value of those deals increased substantially, according to Assembling Value, a quarterly analysis of M&A activity in the global industrial manufacturing industry by PwC US. “The M&A market was overshadowed by a variety of factors that made investors uneasy about making longterm commitments to capital expenditures and hiring,” says Bobby Bono, U. S. Industrial Manufacturing Leader for PwC. “Some European companies slipped into a recession in 2012 due to the foreign debt crisis, while tax implications of the presidential election and resolution of the fiscal cliff in the U.S. seemed to curb enthusiasm for deal making in the last quarter of the year. Although the level of uncertainty regarding the pace of a global recovery remains elevated, we are cautiously optimistic as strong cash reserves and a rebound in the manufacturing sectors of many nations provides hope for continuation of the recovery in industrial manufacturing M&A.” Total value of industrial manufacturing transactions (worth $50 million or more) in 2012 reached $77.8 billion, up 24% from $62.9 billion in 2011. The fourth quarter of 2012 however, accounted for only a small portion of that total, generating 37 deals for a total deal value of $12.3 billion, compared to 47 deals totaling $28 billion in the third quarter of 2012. In addition, mega deals (transactions worth more than $1 billion) in 2012 experienced a significant increase, influencing the uptick in deal values for the year, though only two mega deals were announced in the fourth quarter. According to PwC, 2012 ended strongly with 17 mega deals representing $48.1 billion, compared to 10 mega deals in 2011 totaling $28.4 billion in value. In the fourth quarter of 2012, strategic investors gained significant momentum in announced deals worth more than $50 million, generating more than 90% of the transactions in the quarter, and accounted for more than 80% of all 2012 deals. While strategic investors diversified their activity across all industrial manufacturing segments, financial investors remained more conservative in their acquisition choices, focusing their efforts predominately on the large industrial machinery segment. Divestitures remained a major driver of deal activity during the fourth quarter of 2012 and PwC expects that trend to continue as manufacturers adjust their portfolios in accordance with changing growth prospects. Divestitures accounted for 42% of the total deal activity in the fourth quarter and 2012 witnessed significantly higher levels than 2011, at 39 and 27%, respectively. According to PwC, most of the transactions in the fourth quarter, as well as 2012 overall, were local deals involving targets and acquirers predominately from advanced nations. North America was the most active acquirer region in terms of deals announced, followed by Asia and Oceania, while the United Kingdom and Eurozone region contributed the highest value of the deals in 2012. Of the individual nations, the U.S. remained the leader with 61 acquirers and 60 targets in 2012, which was consistent with PwC’s expectations for increased U.S. activity as manufacturers seek pockets of growth and attractive investments for the strong cash reserves on their balance sheets. “Despite experiencing tepid growth in 2012, U.S. manufacturers have been on a path of restructuring, right-sizing and spinning off, or divesting, non-core businesses, all of which have positively affected the level of M&A activity in 2012,” Bono continues. “In addition, the relative maturity of the industry in North America, along with attractive growth prospects in the form of abundant, inexpensive and more environmentally friendly shale gas, is now a game-changer for the global industrial manufacturing space, boosting the M&A outlook for the region.” After an uptick in BRIC countries’ M&A activity in the third quarter of 2012, and with the exception of China, which remained active in the fourth quarter, deal activity among the rest of the BRIC nations slowed with 2012 finishing below 2011 levels. Of those nations, there was a decline in all but India, where new export orders, new product launches and strengthening demand resulted in positive growth in purchasing activity for a 45th successive month. Despite generating a lower sequential rate of deal activity in 2012, China remains the most active BRIC nation in terms of deal making and continues to show signs of improvement. PwC believes BRIC deal activity could experience a modest uptick in 2013 as those nations are expected to be the growth engine for the global economy. U. S. MANUFACTURING TECHNOLOGY ORDERS UP 4. 8% FROM 2011 McLEAN, VA—November U.S. manufacturing technology orders totaled $421.83 million according to The Association for Manufacturing Technology (AMT). This total, as reported by companies participating in the United States Manufacturing Technology Orders (USMTO) program, was down 11% from October and down 8. 5% when compared with the total of $460.86 million reported for November 2011. With a year-to-date total of $5,212.17 million, 2012 was up 4.8% compared with 2011. These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTO program. “Orders for all of 2012 remain full steam ahead, likely on pace to pass the totals of 2011 and echoing the overall strength of manufacturing for the year,” says Douglas K. Woods, AMT president. “While economic uncertainty remains a concern for both businesses and consumers, we anticipate a steady, albeit slower growth for manufacturing as we begin 2013.” The USMTO report, compiled by the trade association representing the production and distribution of manufacturing technology, provides regional and national U.S. orders data of domestic and imported machine tools and related equipment. Analysis of manufacturing technology orders provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity. U. S. manufacturing technology orders are also reported on a regional basis for five geographic breakdowns of the United States. Northeast Region Manufacturing technology orders in the Northeast region in November totaled $66.02 million, up 1.9% from October’s $64.81 million but down 20.8% when compared with the November 2011 figure. At $713.53 million, 2012 year-to-date was down 6. 4% when compared with 2011 at the same time. Southern Region Southern region manufacturing technology orders totaled $65.47 million in November, down 6.4% from the $69.98 million total for October but 22.6% higher than the total for November 2011. The year-to-date total of $760.48 million is 17.7% more than the comparable figure for 2011. Midwest Region At $129.36 million, November manufacturing technology orders in the Midwest region were down 20.9% when compared with the $163.55 million total for October and down 13. 7% when compared with November a year ago. With a year-to-date total of $1,664.51 million, 2012 was up 3.5% when compared with 2011 at the same time. Central Region November manufacturing technology orders in the Central Region totaled $109.15 million, 14.3% lower than October’s $127.32 million and down 13.0% when compared with the November 2011 figure. At $1,458.43 million, the 2012 year-to-date total was 5. 6% more than the comparable figure for 2011. Western Region Western Region manufacturing technology orders in November stood at $51.82 million, up 7.4% from the October total of $48.23 million and 6.2% higher than the figure for November 2011. The $615.22 million year-to-date total was 6.7% above the total for the same period in 2011. STERLING PARTNERS ACQUIRES SPARTAN COLLEGE OF AERONAUTICS AND TECHNOLOGY CHICAGO—Sterling Partners, a private equity firm with approximately $5 billion of assets under management, has acquired Spartan College of Aeronautics and Technology (Tulsa, OK), a prominent aviation-maintenance school for training pilots, aviation technicians and nondestructive testing (NDT) professionals. Terms of the transaction were not disclosed. Spartan, a bachelor’s degreegranting institution, has graduated approximately 90,000 alumni from all 50 states and 62 foreign nations since its founding in 1928. Spartan graduates are highly sought after by the aviation and heavy maintenance industries to address the unmet need for trained professionals. According to the Bureau of Labor Statistics, approximately 60,000 trained technicians will be needed to fill new and replacement jobs in the U.S. airline industry between 2010 and 2020. Sterling purchased the company from majority owners John A. Walker, Blaine Walker and Justin Walker. Spartan president and CEO Jeremy Gibson will maintain an ownership stake in the business and will continue in his post. Sun Life Assurance Co. Of Canada provided senior debt financing for the acquisition. “We believe Spartan is a clear leader in the aviation and NDT higher education space, with a decades-long reputa tion for high-quality education and a very strong job placement record,” says Jason Rosenberg, a Sterling Partners principal. “It exemplifies Sterling Partners’ focus on investing in education institutions that provide excellent outcomes for their students. Spartan students get great jobs, and there will be a significant shortage of aviation technicians, pilots and nondestructive testing professionals in this country and abroad. Spartan stands uniquely qualified to help meet the needs of the industry by continuing to produce skilled graduates. We look forward to partnering with Spartan CEO Jeremy Gibson to continue to build Spartan and help meet the growing needs of the industry. CONTROL SYSTEM INTEGRATORS CONFIDENT ABOUT INDUSTRY OUTLOOK IN 2013 MADISON, WI—The majority of independent system integration companies questioned in a global survey believe the outlook for the automation industry will improve in 2013. The first-ever survey of system integrators conducted jointly by J.P. Morgan and the Control System Integrators Association (CSIA) reached out to nearly 1,800 professionals worldwide in the automation and control industry. The results suggest that more manufacturers will look to experts like CSIA members for help in managing risk and automating their industrial equipment and systems. Among the industries driving the activity are automotive, oil and gas, food and beverage, chemicals and energy, according to the report. Additional key findings include: • 69% of system integrators expect revenue growth this year. One-quarter of those look for gains of 15% or more • 85% believe demand for integration services will increase or remain steady in 2013 • More than 70% say projects that had been delayed or cancelled will resume if there is no negative change in economic trends “A number of projects were put on hold during the global slowdown in industrial production,” says Bob Lowe, executive director of CSIA. “As a result, our integrator members are seeing pent-up demand that will release as projects come back on line. “What this shows is that plant managers and others who hire CSIA member companies continue to look upon automation as a way to deliver new levels of productivity and competitiveness. These business leaders increasingly see control system integrators as an essential component in capital projects that require proven technical engineering solutions.” SECOND ANNUAL NATIONAL MANUFACTURING DAY SLATED FOR OCT. 4 ROCKFORD, IL—After a successful initial celebration last year, the next Manufacturing Day has been scheduled for Friday, Oct. 4, 2013. Manufacturers, educational institutions and others are encouraged to host events that will highlight the importance of manufacturing to the nation’s economy and draw attention to the many rewarding high-skill jobs in manufacturing fields. The effort is co-produced by the Fabricators & Manufacturers Association International (FMA), the National Association of Manufacturers (NAM), The Manufacturing Institute and the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP). Industrial Strength Marketing, a Nashville-area marketing agency, has joined the effort as a guest producer for the 2013 event. In the first year, more than 240 events were held in manufacturing facilities in 37 states and more than 7,000 people participated. This year’s celebration will feature open houses, public tours, career workshops and other activities to increase public awareness of modern manufacturing. Events also will introduce manufacturers to business improvement resources and services delivered through the MEP’s network of hundreds of affiliated centers across the country. “Manufacturing Day is a great opportunity to shift Americans’ perception that it is not our grandfather’s manufacturing anymore and to showcase the tremendous career opportunities manufacturing has to offer,” said Jay Timmons, NAM president and CEO. “This day is an engaging way to attract young people and get them excited about pursuing a career in a technology-driven, innovative environment that will also provide a good-paying job. We encourage all manufacturers and manufacturing associations to get involved and share what we already know—manufacturing makes us strong.” To learn more about Manufacturing Day, visit www.mfgday.com, where those wishing to host events will find resources to help them prepare. Visitors to the site also will find an interactive map of Manufacturing Day events. NASA UNVEILS STRATEGIC SPACE TECHNOLOGY INVESTMENT PLAN WASHINGTON, DC—NASA's Strategic Space Technology Investment Plan has been posted to the agency's website. The comprehensive strategic plan prioritizes space technologies essential to the pursuit of NASA's mission and achievement of national goals. The NASA Strategic Space Technology Investment Plan was created following development of a series of agency draft Space Technology Roadmaps. After careful review of the roadmaps by the National Research Council, with input from the public and key stakeholders, NASA finalized this new investment plan. It provides guidance for NASA's space technology investments during the next four years, within the context of a 20-year horizon. The plan will be updated approximately every two years, as appropriate, to meet agency and national needs. In 2010, the president and Congress unveiled an ambitious new direction for NASA, which includes renewed investment in space technology to align mission directorate activities, increase capabilities, lower mission costs and support long-term needs. The result has been an aggressive and prioritized technology investment by NASA that enables exploration and science missions while also supporting other government and commercial space activities. The plan is based on a four-pillar system of goals to ensure NASA investments optimize the benefits of key stakeholders, other U.S. government agencies, the private sector and the national economy. VISION 2013 CANCELLED, SHOW MOVES TO A BIENNIAL CYCLE The VISION show in Stuttgart, Germany is changing to a biennial cycle with immediate effect. This means that VISION 2013 will not take place. This decision was taken after extensive analyses by Messe Stuttgart in conjunction with the VDMA Machine Vision Association and key players in the machine vision industry. “The new biennial cycle will extend the leading position of VISION still further and consolidate its importance as a global innovation platform,” says Ulrich Kromer, managing director of Messe Stuttgart. “Thanks to this strategic development, VISION will also be adapted to the changed needs of the machine vision industry.” Exhibitors seem to want the extra time, according to Patrick Schwarzkopf, head of the VDMA Machine Vision Association, the professional and promotional supporter of VISION. “Through this decision, VISION is taking account of the request by many exhibitors,” Schwarzkopg says. “They want to offer trade visitors a genuine raft of innovations. The biennial cycle provides the best conditions in this respect.” In November 2012, VISION celebrated its 25th anniversary and the hitherto largest and most successful edition of the event. It has accompanied the machine vision industry over the last 25 years, and has grown with it. It is now essential to establish a good position for the industry's leading trade fair during the next 25 years and develop it even further. With the change to a biennial cycle, VISION can also be permanently staged on the worldwide introduced November date in Hall 1, the L-Bank Forum. This would not have been possible every year with an annual date. BUSINESS NEWS CONCORD, MA—Oxford Instruments, a manufacturer of analytical instruments, is pleased to announce a new sales and distribution agreement with Eastern Applied Research. This partnership aims to strengthen the Oxford Instruments regional distributor network by having Eastern Applied Research distribute the handheld X-MET7000 Series XRF analyzers throughout the Northeast into the precious metal, mining, electronics (RoHS), coating thickness and environmental markets. SCHAUMBURG, IL—Heidenhain Corp., a global precision measurement components and systems, has introduced a new micro-site—an offshoot of its website based in Germany—that showcases the company’s controls, their features, and real-world applications. The company’s new control micro-site covers 5-axis fundamentals, featuring both video and flash animations for visual learners, as well as the Chat Forums giving visitors the opportunity to engage in relevant online conversations. On this new control micro-site, visitors will also be able to download various TNC manuals as well as communication and programming station software. An area to subscribe to Heidenhain’s Control newsletter titled “Klartext” (translated as “PlainText”), available in English, is also available on this site. STOCKHOLM, SWEDEN—Hexagon AB, global provider of portable metrology software, has acquired New River Kinematics (NRK), a U.S. based engineering company that specializes in 3-D analysis software for portable metrology applications. NRK, founded in 1994, develops portable metrology software solutions. “A strong resource in the field of measurement automation, NRK provides excellent growth prospects for Hexagon as more and more manufacturers look to increase efficiencies,” says Hexagon President and CEO Ola Rollén. “Additional opportunities include leveraging Hexagon’s distribution network and existing customer base to increase SA’s penetration in international markets and growing segments like aerospace, and to team up with Intergraph to strengthen applications in shipbuilding, component fabrication and other largescale markets.” ROCK HILL,SC—3D Systems has signed a definitive agreement to acquire Geomagic Inc., a global provider of 3-D authoring solutions including design, sculpt and scan software tools that are used to create 3-D content and inspect products throughout the entire design and manufacturing process. This acquisition is subject to customary closing conditions, and was expected to close during the first quarter of 2013. The combination of Geomagic’s sculpting, modeling, scanning and inspecting software tools with 3-D Systems’ portfolio strengthens its 3-D authoring platform and positions the company for accelerated growth in the fast-growing, 3-D content-to-print space. The transaction adds complementary products and technology, increases the company’s reseller coverage globally and is expected to be accretive to its non-GAAP earnings in the first full year following the completion of transaction.
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