Omron enters safety device market with STI acquisition

Tokyo, Japan—Omron Corp. will acquire Scientific Technologies Inc. for $94 million plus net cash and working capital adjustments under a definitive agreement between the two companies.


Tokyo, JapanOmron Corp . will acquire Scientific Technologies Inc . for $94 million plus net cash and working capital adjustments under a definitive agreement between the two companies. The transaction, approved by the boards of directors of both companies, does not include STI's Automation Products Group (APG).

The acquisition is said to give Omron's Industrial Automation Business (IAB) a key position in the North American safety devices market and reportedly will make it a major global player in a 110-billion-yen (approximately $940 million) market that is growing 15% annually. A primary supplier to industrial workplaces, IAB established a dedicated safety devices division last year, enhancing its lineup of safety components and networks and boosting its system solutions capabilities and safety-design consulting services. With the acquisition, the company reportedly will grow its safety business from 10 billion yen ($85 million) in fiscal year 2005 to 30 billion yen ($255 million) by fiscal year 2008.

IAB expects to enhance its lineup of products with STI's suite of safety light curtains, laser scanners, and other safety devices. It also anticipates accelerating new product development by integrating STI's optical applications and value-added services with Omron's automation, sensing, and control technologies. The effort will make use of Omron's sales and distribution network that covers more than 60 countries and multiple industries, including automotive, semiconductor, electronic devices, chemicals, cosmetics, and food processing.

"Omron IAB and STI will create a global safety equipment supplier of safety, sensing, and control technologies that satisfies customers' demands for not just labor productivity but also product quality, employee safety, and environmental friendliness," said Fumio Tateisi, IAB president and Omron executive vice president. "By acquiring STI, we will be able to offer a wider range of cutting-edge safety products and consultancy services to our customers," he went on.

The transaction is subject to closing conditions, including regulatory approval and approval by the companies' shareholders.

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