Industrial communications: Beijer Electronics acquires Westermo

Malmö, Sweden—Beijer Electronics announced today that it is acquiring Swedish company Westermo, active in industrial data communications for about $33 million (SEK 215 million, Swedish Krona) in stock. Westermo, with 148 employees, has estimated 2007 sales of approximately $34.5 million (SEK 225 million), and an operating margin before depreciation and amortization of some 10%, Beijer says.


Malmö, Sweden

Beijer Electronics

announced today that it is acquiring Swedish company


, active in industrial data communications for about $33 million (SEK 215 million, Swedish Krona)

Commenting, Göran Sigfridsson, Beijer Electronics’ CEO and president, said: “The acquisition of Westermo is a strategic milestone in the Beijer Electronics group’s continued development. Westermo’s broad product range and high organic growth complements and enhances Beijer Electronics’ automation offering for industrial and infrastructure.”

Westermo is a family business founded in 1975, described as “a niche data communications player with specialized know-how in industrial applications.” This segment has especially stringent demands for robust products in harsh environments, which require high reliability and safety, Beijer noted. Westermo products include switches, routers, fiber-optic modems, and modems for LANs and wireless communication. Westermo also manufactures at its plant in Stora Sundby, outside Eskilstuna, west of Stockholm. The company conducts marketing and sales under the Westermo brand, and has proprietary sales companies in Sweden, the U.K., Germany, France and Singapore, plus some 30 distributors worldwide. The Nordic market represents some 20% of sales, while the rest of Europe provides 70%.

At present, Westermo has an estimated global market share of some 5% for the products it sells, Beijer says, outgrowing the market, posting average yearly growth of 17% in the last 10 years. Estimated growth for 2007 is consistent with this average.

“Data communications are becoming a more important part of the automation solutions in manufaturing and infrastructure projects. That’s why we anticipate yearly growth of 15-20 % in industrial communications, and especially in the Industrial Ethernet segment, where Westermo has a strong product offering,” continued Sigfridsson, “at the same time, many customers want to deal with fewer but larger vendors of total solutions. So with the acquisition of Westermo, Beijer Electronics is sharpening its overall competitiveness.”

For the short term, the main coordination gains are in sales, Beijer says. Largely, Beijer Electronics and Westermo target the same customers with complementary products. In the slightly longer term, the coordination gains will extend to procurement, product development and production. Westermo will be an independent business area of Beijer Electronics. Its management will retain their positions, with Lars Ola Lundqvist as CEO, whose experience includes many years with ABB Robotics.

The company reportedly will be consolidated into Beijer Electronics’ accounts from Jan. 1, 2008. The acquisition will be financed with existing funds and loans and is expected to have a positive impact on Beijer Electronics’ earnings per share in 2008.

—Edited by Mark T. Hoske, editor in chief
Control Engineering News Desk
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