Zurich, Switzerland: ABB has announced the acquisition of B&R, the largest independent provider focused on product- and software-based, open-architecture solutions for machine and factory automation worldwide. B&R, headquartered in Eggelsberg, Austria, employs more than 3,000 people, including about 1,000 R&D and application engineers. It operates across 70 countries, generating sales of more than US$600 million (2015/16) in the US$20 billion machine and factory automation market segment. The combination will result in an unmatched, comprehensive offering for customers of industrial automation, by pairing B&R’s innovative products, software and solutions for modern machine and factory automation with ABB’s world-leading offering in robotics, process automation, digitalisation and electrification.
Through the acquisition, ABB expands its leadership in industrial automation and will be uniquely positioned to seize growth opportunities resulting from the Fourth Industrial Revolution. In addition, ABB takes a major step in expanding its digital offering by combining its industry-leading portfolio of digital solutions, ABB Ability, with B&R’s strong application and software platforms, its large installed base, customer access and tailored automation solutions.
With the acquisition, ABB will expand its industrial automation offering by integrating B&R’s products in PLC, Industrial PCs and servo motion as well as its software and solution suite.
B&R has grown successfully with a revenue CAGR of 11 percent over the last two decades. Revenues more than quintupled since 2000 to more than US$600 million (2015/16). The company has a rapidly growing global customer base of more than 4,000 machine manufacturers, a proven track record in automation software and solutions and unrivalled application expertise for customers in the machine and factory automation market segment.
Both companies have complementary portfolios. ABB is a provider of solutions serving customers in utilities, industry and transport & infrastructure. B&R is a solution provider in the automation of machines and factories for industries such as plastics, packaging, food and beverage. The joint commitment to open architecture increases customer choice and flexibility facilitating connectivity in increasingly digitalised industries.
On closing of the transaction, B&R will become part of ABB’s Industrial Automation division as a new global business unit – Machine & Factory Automation – headed by the current MD, Hans Wimmer. Both companies consider B&R’s management and employees as a key driver of future growth and the business integration together with their counterparts from ABB. The co-founders of B&R, Erwin Bernecker and Josef Rainer, will act as advisors during the integration phase to ensure continuity.
The integration will be growth-focused and live by the ‘best-of-both-worlds’ principle, with ABB adding its own PLC and servo drive activities to the offering of the new business unit in a phased approach. ABB underlines its clear commitment to continuing the B&R growth story by articulating a mid-term sales ambition to exceed US$1 billion.
ABB is committed to further investing in the expansion of B&R’s operations and to building on the company’s successful business model and brand. B&R’s headquarters in Eggelsberg will become ABB’s global centre for machine and factory automation.
With this acquisition, ABB becomes the largest industrial automation player in Austria. ABB has operated in Austria for more than 100 years. With the strong future role, B&R and its headquarters in Austria will play as part of ABB, Austria, particularly Upper Austria will benefit. The planned expansion of the R&D and production activities in Eggelsberg and Gilgenberg will strengthen Austria’s high-tech industrial landscape.
The transaction multiple is in line with peer valuations. The parties agreed not to disclose the purchase price. ABB will finance the acquisition in cash. The transaction is expected to be operationally EPS accretive in the first year and is expected to add significant synergies of about 8 percent of B&R’s stand-alone revenue in year four. The transaction is expected to close in summer 2017, subject to customary regulatory clearances.