Leading connectivity company, TE Connectivity (TEL - Analyst Report) has signed an agreement to acquire global designer and manufacturer of sensor and sensor-based systems, Measurement Specialties Inc. . Valued at $1.7 billion, including debt, the deal is expected to close in 2014, subject to regulatory approvals. TE Connectivity will fund the transaction with cash and debt. The acquisition is expected to prove accretive to the company’s earnings in fiscal 2015.
The acquisition is a strategic move by TE Connectivity in order to become the leader in the high potential sensor industry. Further, post acquisition, Measurement Specialties is expected to contribute around $40 billion to TE Connectivity’s addressable market. This deal will also help TE Connectivity offer an unmatched range of connectivity and sensor solutions. This will help the company to capitalize on the growing connectivity demand in today’s world. The integration of Measurement Specialties' leading range of sensors and sensor systems into TE's sensor business will establish TE largest major sensor company in the world.
Based in Hampton, VA, Measurement Specialties offers an extensive portfolio of sensor technologies which include pressure, vibration, force, temperature, humidity, ultrasonics, position and fluid, for a wide range of applications and industries.
Notably, Citi and Centerview Partners LLC are financial advisors to TE Connectivity. Barclays plays the role of an exclusive financial advisor to the Measurement Specialties' board of directors. This is the second acquisition for TE Connectivity this year after the recent acquisition of SEACON Group in Apr 2014. The SEACON Group takeover positioned TE Connectivity as the leader in connectivity solutions for harsh environments.
TE Connectivity’s operates through four segments which together command a $100 billion market share. Moreover, 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. and Ballard Power Systems Inc. (BLDP - Snapshot Report). Both carry a Zacks Rank #2 (Buy).