Emerson strengthens automation position with Afag, Flexim acquisitions

Global technology and software company Emerson announced last week a definitive agreement to acquire Afag Holding AG, a vendor of electric linear motion, feeding and handling automation solutions. The St Louis, Missouri-headquartered company also announced a definitive agreement to acquire FLEXIM Flexible Industriemeßtechnik GmbH, a provider of clamp-on ultrasonic flow measurement for liquids, gases and steam.

Headquartered in Zell, Switzerland, Afag brings ‘state-of-the-art’ technology and innovation to Emerson. The transaction will enhance Emerson’s capabilities in factory automation, one of the company’s four priority adjacencies, and create a motion portfolio combining Afag’s electric linear motion solutions with Emerson’s pneumatic motion technology. 

Afag serves customers in attractive, growing end segments including battery manufacturing, automotive, packaging, medical, life sciences and electronics. The electric linear motion segment expands Emerson’s served market by more than US$9 billion and is expected to grow mid-single digits annually, supporting Emerson’s long-term, profitable organic growth.

Afag brings exciting technology that will enable Emerson to accelerate growth in our existing $900 million factory automation business,” Ram Krishnan, chief operating officer of Emerson, said in a media statement. “As discrete and hybrid customers continue to accelerate electrification across their manufacturing processes, Afag’s technology is ideally suited to provide improved energy efficiency and performance gains.” 

Krishnan added that the company looks forward to “combining Afag’s motion capabilities with our existing pneumatic leadership, creating a unique and differentiated solution for our customers. Afag and its employees will play an important role in enhancing Emerson’s strength and innovation in factory automation.”

“We are excited to join Emerson and build on its existing factory automation leadership, while further expanding our global reach,” according to Adrian Fuchser, chief executive officer of Afag. “Our customers rely on Afag for essential, customized systems and we are energized by this opportunity to create a more comprehensive and holistic solution for their motion needs. We share Emerson’s vision of providing complete solutions in essential industries and we look forward to driving continued success as part of Emerson.” 

The transaction is expected to close by the end of Emerson’s fiscal 2023, subject to customary closing conditions, including receipt of regulatory approvals. Terms of the transaction were not disclosed. Afag will be reported in Emerson’s Discrete Automation segment. For the transaction, Bryan Cave Leighton Paisner LLP is serving as legal advisor to Emerson.

Emerson also announced its decision to acquire Flexim that brings highly differentiated, complementary technology and strong customer relationships to Emerson, with an installed base of more than 100,000 flowmeters, as well as approximately 450 employees. 

Headquartered in Berlin, Germany, Flexim provides highly accurate, low-maintenance clamp-on ultrasonic flow measurement technology for a broad range of attractive end markets, including chemical, water and wastewater, life sciences, food and  beverage, and power generation. The transaction will expand Emerson’s automation portfolio and measurement capabilities, complementing its existing flow measurement positions in Coriolis, differential pressure, magmeter and vortex flow measurement. 

Underpinned by favorable end market growth and technology leadership, the global ultrasonic clamp-on flowmeter market is expected to grow in the high single digits annually longer-term. Upon the close of the transaction, Flexim’s Berlin headquarters is planned to become Emerson’s Ultrasonic Flow Measurement Center of Excellence.

“We are excited to further enhance Emerson’s capabilities with the addition of Flexim’s leading clamp-on ultrasonic measurement technology, which is a strong complement to our intelligent devices portfolio,” Krishnan said in another media statement. “Flexim brings an exciting new technology that will enable us to accelerate growth. The combination of Emerson’s comprehensive measurement suite and Flexim’s innovative technology will enhance the value we bring to customers across a variety of industries. We look forward to welcoming Flexim’s skilled and dedicated employees to Emerson, where they will continue to play a critical role in driving the success of the business.”

“We are thrilled to be joining Emerson, which shares our culture of innovation and focus on technology and R&D,” said Jens Hilpert, chief executive officer and co-founder of Flexim. “This transaction will enable us to provide more comprehensive solutions to a broader set of customers, leveraging Emerson’s global intelligent devices leadership and commercial excellence. As we join forces with Emerson, we will continue to serve our customers and utilize our combined capabilities to solve essential measurement needs.”

The transaction is expected to close by the end of Emerson’s fiscal 2023, subject to customary closing conditions. Flexim is expected to be accretive to Emerson’s sales growth, gross margins and adjusted EBITA margins. Terms of the transaction were not disclosed. Flexim will be reported in Emerson’s Measurement & Analytical segment. For the transaction, Evercore is serving as financial advisor and Freshfields Bruckhaus Deringer LLP is serving as legal advisor.

Earlier this month, Emerson collaborated with international biopharmaceutical company Sartorius to natively integrate Sartorius’ Biostat STR Generation 3 line of bioreactors with Emerson’s DeltaV distributed control system (DCS). The integration will provide a foundation for semi-autonomous operations and up to 80 percent less integration time.