Product category:
Hazardous area interfaces, Enclosures
News Release from: Industrial Automation INSIDER | Subject: Cooper acquires MTL
Edited by the Processingtalk Editorial
Team on 14 January 2008
MTL joins Cooper Crouse-Hinds for
GBP140M
The latest issue of the INSIDER presents the story and background to the Cooper Industries GBP140m agreed bid for MTL, a deal that will bring down the curtain on 37 years of independence
One of the UK's last significant independent players in the process automation industry looks set to pass into foreign ownership with the news, released shortly before Christmas, that Bermudan registered and Houston based Cooper Industries had made an agreed GBP140m bid for Luton, UK based MTL Instruments Group The news closed a year in which MTL had itself been on the acquisition trail
This article was originally published on Processingtalk on 8 Aug 2006 at 8.00am (UK)
Related stories
Industrial Automation Insider - by Podcast!
Insider is taking its first tentative steps into the world of ''Podcasting'' in collaboration with PR agency Ballard Communications Management (BCM)
Industrial Automation Insider December issue
Summaries of the main stories in this month's Insider are presented below: further information is presented on the website, and in the Insider Podcast, downloadable from the website
In May it bought Australian wireless technology pioneer Elpro International; in June it acquired a 90% stake in UK process alarm specialist RTK Instruments; and in July it bought the UK specialist SCADA supplier Ocean Technical Systems (OTS).
Nor has its putative new parent been exactly inactive.
Immediately after Christmas it announced three more acquisitions totalling some USD100m: Sure Power, an Oregon based supplier of vehicle electrical systems; Omnex, a Canadian industrial wireless networking company; and Roam Secure, a Virginian provider of text based alerting and regional mass notification systems.
Further reading
From wireless boloney to fibre-optics
The Emerson launch of their 2.4GHz wireless system availability at last in Europe is the lead story in the January issue of the Industrial Automation Insider
Honeywell acquires Enraf - an 'Insider' report
The July issue of 'Insider' reports that Honeywell is in acquisition mode, "looking for portfolio expansion" after the agreed acquisition of Enraf, the oil and gas terminal automation system suppliers
ICS Triplex teases the competitors
The August issue of Insider from Andrew Bond has commentary on the latest version of the NI LabVIEW, a viewpoint on the latest MTL acquisition and notes how ICS Triplex is teasing their competitors
Cooper Industries has a market capitalization of approximately USD10bn and had revenues of USD5.2bn in 2006 of which some 85% came from electrical products.
It operates through eight divisions:.
* Cooper B-Line - support system and enclosures.
* Cooper Bussmann - circuit protection.
* Cooper Crouse-Hinds - industrial and hazardous area electrical products.
* Cooper Lighting - retail, commercial and industrial lighting.
* Cooper Menvier - emergency lighting, security systems, fire detection systems.
* Cooper Power Systems - medium and high-voltage electrical equipment.
* Cooper Wiring Devices - industrial, commercial and residential wiring systems.
* Cooper Tools Group - industrial, commercial and consumer hand and power tools.
The offer for MTL has been made through Cooper UK, a wholly owned subsidiary established in late 2006 as a holding company for future UK acquisitions.
However, as MTL chief executive Graeme Philp explained to INSIDER, the effective bidder is Cooper Crouse Hinds which is a world leader in flameproof and explosion-proof technology for hazardous areas.
Cooper has agreed to pay 708.5p for each MTL share which represents a premium of 30% on the price immediately before it first approached MTL at the beginning of November and 18.1% on the price on December 12th, immediately before MTL announced that it had been approached.
MTL had revenues of GBP85.3m and net income of GBP5.5m in 2006 so the Cooper offer represents a price/earnings multiple of 26 to 1.
The MTL board has unanimously recommended acceptance, advice which has already been followed by all of the directors in respect of their own holdings and by a number of institutional shareholders representing, in total, some 36% of the total issued share capital.
While the rest of the shareholders have yet to have their say and there remains the theoretical possibility of a counter bidder emerging, Philp told INSIDER that "We should be in a position to be fairly sure that the deal is going ahead by mid January".
Child of the '70s MTL's history goes back to the early 1970s when a group of engineers including Ian Hutcheon, Chris Towle and Edward Lowe failed to persuade their then employer and the UK's leading process automation vendor, George Kent, of the potential of the revolutionary concept of intrinsic safety for powering electrical devices in flammable atmospheres and decided to set up on their own.
As Measurement Technology the new company introduced its first shunt diode safety barriers in 1971 and by 1977 had sales of more than GBP1m.
By that time George Kent had been acquired by Brown Boveri of Switzerland and disappeared into what eventually became ABB.
MTL, for its part, has since become not just a world leader in hazardous area technology but has diversified its portfolio both organically and through acquisition with the aim of becoming the leading supplier of building blocks from which the major process automation vendors can assemble their offerings.
In his internal announcement, Philp told MTL employees that, as a leader in flameproof and explosion-proof technology for hazardous areas, Cooper Crouse Hinds supplies electro-mechanical equipment such as switches and lighting units and mechanical equipment such as flameproof boxes and other enclosures but, crucially, doesn't have a significant electronics business.
It's therefore looking for MTL to become its technology subdivision.
"This is almost perfect for us because it allows us to remain intact with no change in our management or organizational structure," he claimed.
Philp also pointed to a serendipitous fit between the two companies' geographical spread with MTL strong in India and China where Cooper Crouse Hinds is comparatively weak while the positions are reversed in mainland Europe and, particularly, Germany.
Read the rest of the history and development of the MTL and Cooper businesses in this month's INSIDER.
• Industrial Automation INSIDER: contact details and other news
• Email this article to a colleague
• Register for the free Processingtalk email newsletter
• Processingtalk Home Page
Search the Pro-Talk network of sites
