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Thoughts from MCAA, part 3
May 24, 2007

"Whatever happened to that company? You know...what's-their-name? We used to buy flowmeters from them."

You might have had a conversation like this over the last few years if you buy process sensors and instruments. You might have been discussing pressure sensors or something similar, but even a casual observer of the instrumentation industry should have noticed that many companies have changed hands. This is actually going on in all sorts of areas so this specific area is nothing unique. It can get confusing though as you try to sort through who now owns what.

One of the presentations at the MCAA meeting was by Leopold Streit from Siemens. He was involved in the acquisition of Controlotron, and the integration of their line of clamp-on ultrasonic flowmeters into the larger Siemens instrumentation portfolio. It made for an interesting case study from the buyer's standpoint.

Large companies, like Siemens, have been making purchases of smaller specialized producers for a number of reasons. The primary one that affects you as an end user, is the desire to fill out a product offering. Siemens has a very comprehensive instrumentation selection, but they didn't have clamp-on ultrasonics. Streit said that they considered either creating their own line from scratch or buying an existing company. The former strategy is always tricky and not something they take lightly. It can be expensive and time-consuming. The latter is usually faster and has the benefit of bringing an existing customer base with it. Ultimately it boils down to availability and cost. The Controlotron acquisition made good sense in this case. But the question is, what does the acquiring company do with the old one after the purchase? This discussion affects you directly if you're a customer of either company.

More on Siemens' strategy tomorrow.

Posted by Peter Welander on May 24, 2007 | Comments (0)