Accelerating automation through M&A

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Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes.

Among the recent deals of note: Sealed Air Corp. (NYSE: SEE) said it will buy Automated Packaging Systems, a manufacturer of automated bagging systems, for $510 million. The target is known for its bagging machines and pre-opened bags on a roll. The company, which has about in $290 million in annual sales, also offers recycled film services. APS operates seven manufacturing facilities in the U.S. and U.K.

“The addition of APS is well aligned with our Reinvent SEE goal of doubling our innovation rate over the next five years,” says Sealed Air CEO Ted Doheny. “This transaction expands the breadth of our automated solutions and sustainable packaging offerings, giving us access to growth opportunities in the markets we serve.” Sealed Air is known for making Bubble Wrap.

In the healthcare sector, Permira-backed Corin Group has acquired Omni Orthopedics. The target makes robots that assist with knee replacement surgery. Omni’s technology is designed to assist surgeons with positioning implants for each patient, which is expected to produce less pain and faster rehabilitation. “The U.S. market for robotics in orthopedics is growing at a very rapid pace, and with the addition of Omni’s technologies, we expect Corin to remain at the forefront of development in robotics and computer-assisted surgery,” says Henry Minello, a principal in Permira’s healthcare group.

Robot manufacturers are also attracting interest from foreign buyers. Japanese technology company Hitachi is buying JR Automation Technologies from Crestview Partners for about $1.4 billion in a deal. JR Automation builds production lines and logistics systems using industrial robots for the aerospace, automotive, consumer and food and beverage industries. The acquisition expands Hitachi’s presence in the U.S. robotics sector.

“With our combined capabilities, Hitachi and JR will be a uniquely qualified global leader in next generation smart manufacturing,” says JR Automation CEO Bryan Jones.

In 2018, Barnes Group Inc. (NYSE: B) purchased Gimatic SrL for $435 million. The target develops robotic grippers, end-of-arm tooling systems and sensors.

“In the manufacturing and logistics fields, there has been a growing demand for automation because of decreased working age populations, intensifying global competition, and further quality improvement requirements to prevent significant product recalls,” according to a Hitachi release. “As a result, the global robot-based automation market continues to expand, with a high average growth rate exceeding 10 percent per year.”

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