Invensys reorganizes into three divisions; plans to sell other businesses

London, U.K. - Invensys plc announced Feb. 19 that it will try to speed up it recovery by reorganizing into two core divisions, maintaining its development division, and by selling many of its other businesses.

02/21/2002


London, U.K. - Invensys plc announced Feb. 19 that it will try to speed up it recovery by reorganizing into two core divisions, maintaining its development division, and by selling many of its other businesses.

The two core divisions will be Production Management and Energy Management, which have combined sales of 4 billion pounds. The Development Division has sales of 0.7 billion pounds. This reorganization is expected to help Invensys sell its Industrial Components and Systems businesses, which have sales of 2.3 billion pounds, in order to reduce its overall debt.

"After a rigorous examination of our businesses and opportunities, we now have a clear understanding of today's smarter customers, tougher competitors and the risks and rewards before us," says Rick Haythornthwaite, Invensys' ceo. "We were determined to challenge and fundamentally change our existing shape. What we have carved out is a more compact group capable of both rapid rebound and sustainable long-term growth. This route delivers a substantial premium on value creation over all other options we examined."

Invensys reported that its November 2001 strategy review showed a good core of brands, products and people on which to build, backed by a large installed customer base. "In certain sectors, these customers place a particularly high value on our deep understanding of their needs and our ability to apply our technology to deliver innovative solutions. At the same time, they cite poor execution as the main barrier to our becoming the partner they seek," states the company. "And, while our businesses are mostly sound, our spread and complexity as a group has hindered our transfer of knowledge and best practices, resulting in underperformance relative to our global peers." Invensys adds that its review demonstrated that it possesses the industry knowledge, installed customer base and technology to build a commanding position in two specific areas: production management and energy management.

The new Production Management Division will include Foxboro, Wonderware, Triconex, APV, Eurotherm and Baan. Together, these businesses have total sales of 1.6 billion pounds. They will provide production technologies and services to customers in the oil, gas and chemicals; power generation; food, beverage and personal healthcare; and discrete and hybrid manufacturing sectors.

The new Energy Management Division will combine Invensys' Energy Solutions, Metering Systems, Appliance and Climate Controls and Power Systems businesses. They have total sales of 2.4 billion pounds. This division will serve markets related to power and energy infrastructures, as well as industrial, commercial and residential buildings.

The Development Division's businesses will continue to include Rail Systems, Wind Power (Hansen) and Power Components. Invensys reports that, 'Each of these faces significant milestones in the near future, which will clarify their ability to add value to the core group over time.'

Businesses expected to be sold as part of the Industrial Components and Systems Division include Rexnord, Flow Control, Fasco Motors, Sensor Systems, Drive Systems, BAE Automated Systems, Energy Storage and CompAir. Invensys adds that, while these are good businesses, they fall outside the scope of the overall firm's new strategy, and they also operate in consolidating markets. Invensys says they will be managed separately 'through to disposal' to ensure that shareholder value is protected.

Control Engineering Daily News Desk
Jim Montague, news editor
jmontague@cahners.com





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