IBM agrees to buy MRO Software; Teledyne to buy Rockwell Scientific

08/08/2006


IBM plans to acquire MRO Software Inc. for $740 million and Teledyne agreed to acquire Rockwell Scientific Co. for $167.5 million in independent merger developments.

IBM and MRO Software Inc. announced on Aug. 3 that the two companies have entered into a definitive agreement for IBM to acquire MRO Software Inc., a publicly held company based in Bedford, MA, in a cash transaction, approximately $740 million, or $25.80 per share. The acquisition is subject to MRO Software shareholder and regulatory reviews and other customary closing conditions. It is expected to close in fourth-quarter 2006. MRO’s asset and service management software and consulting helps companies manage how they buy, maintain, and retire assets, such as production equipment, facilities, transportation, and information technology (IT) hardware and software. Industries include utilities, manufacturing, energy, pharmaceutical, and telecommunications. This acquisition builds upon IBM's strategy to leverage business consulting, IT services, and software to develop repeatable tools that help clients optimize business, IBM says.

“MRO asset management technology and consulting services will be integrated into IBM Software and IBM Global Services offerings. As a result of the acquisition of MRO, IBM will be the only company to provide the solution to this convergence of IT and industrial assets,” IBM says. 'In a recent IBM study, 40% of CEOs indicated that asset utilization would be a key focus in strengthening financial performance,' said Al Zollar, general manager, IBM Tivoli software. MRO software will help IBM customers do that.

After the acquisition, IBM says, it intends to:

  • Establish MRO Software's operations as a business unit within IBM's Tivoli software unit under general manager, Al Zollar;

  • Incorporate MRO software technology into IBM's Tivoli software;

  • Market and sell MRO software products through IBM's and MRO's worldwide sales channels and IBM Business Partners;

  • Expand the scope and capabilities of IBM's business and IT asset management consulting practices, and deliver MRO services through IBM Global Services; and

  • Build on the companies' long-standing business relationship, begun in 1996.

IBM will leverage MRO's software portfolio and management consultants to provide clients with one approach to managing all industrial and IT assets. MRO's offerings easily can be integrated into IBM's service oriented architecture (SOA)-based capabilities, including business process management and IT service management, the companies say. Consolidated asset management (networks, RFID, embedded chips, and IP addresses) can save resources, including industrial equipment in one automated environmentthe fiscal year ending Sept. 30, 2005.

Teledyne Technologies Inc. , Rockwell Automation Inc. , and Rockwell Collins Inc. announced July 26 that Teledyne entered into an agreement to acquire Rockwell Scientific Co. for $167.5 million in cash, with the sellers retaining certain liabilities. Rockwell Scientific, headquartered in Thousand Oaks, CA, provides research and development services, develops and manufactures infrared and visible light imaging sensors for surveillance. The acquisition of Rockwell Scientific, 50% owned by each of Rockwell Automation and Rockwell Collins, is subject to customary closing conditions.

Current owners entered into service agreements to continue funding research performed by Rockwell Scientific. In addition, Teledyne agreed to license certain intellectual property of Rockwell Scientific to Rockwell Automation and Rockwell Collins. For fiscal year ended Sept. 30, 2005, Rockwell Scientific had revenue of $114 million. Rockwell Scientific’s R&D capabilities for microwave and millimeter-wave semiconductors, RF MEMS, and very high-speed mixed signal circuits, are said to be complementary to several Teledyne business units.

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





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