TE Connectivity Ltd. (TEL - Analyst Report) has recently announced its plans to acquire SEACON Group in an all-cash deal worth $490 million. The acquisition of SEACON Group expands TE Connectivity’s range of connectivity solutions to the high potential oil & gas sector. Subject to regulatory approvals, the deal is expected to close in the current fiscal year of the company.
The acquisition of SEACON Group also positions TE Connectivity as the leader in connectivity solutions for harsh environments. Prior to this in Apr 2012, TE Connectivity had acquired Deutsch, a leading provider of high-performance connectivity solutions for harsh environment applications, to better serve customers in the Industrial and Commercial Transportation, Aerospace and Defense, and Rail markets. The acquisition was valued at €1.55 billion.
The SEACON group primarily caters to the military marine and sub-sea sectors for remotely operated vehicles (ROV) / autonomous underwater vehicles (AUV), oil and gas, environmental and oceanographic applications. Therefore, through this acquisition, TE Connectivity intends to combine its cable product line with SEACON’s fiber optic capability and Deutsch’s power connector range to create a comprehensive product portfolio offering for undersea applications.
TE Connectivity is the market leader in the connectivity business with a comprehensive portfolio.The company’s four segments together command a $100 billion market share; and the company’s business is expected to grow at an annual rate of 5% for the next 5 years.
TE Connectivity currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry, which look promising, include CTS Corp. (CTS), Active Power Inc. (ACPW - Snapshot Report) and Ballard Power Systems Inc. (BLDP - Snapshot Report). While CTS Corp. sports a Zacks Rank #1 (Strong Buy), Active Power and Ballard Power Systems carry a Zacks Rank #2 (Buy).