Industrial manufacturer Eaton Corporation ( ETN - Analyst Report ) has decided to acquire Omaha, Nebraska based E.A. Pedersen Company. The latter is the manufacturer of medium voltage switchgear catering primarily to the electrical utilities.

E.A. Pedersen Company’s offering of products include metal-clad switchgear, power control buildings and relay control panels. Eaton’s decision to acquire Pedersen Company gels well with the strategy to strengthen its footprints in the medium voltage assembly business by adding important utility-oriented power products. Plus, this acquisition will add to Eaton’s custom engineering capabilities for its U.S. customers.

We believe Eaton’s decision to acquire an electrical equipment manufacturer is guided towards its ulterior aim to transform into a diversified industrial enterprise with important positions in core electrical, hydraulic and aerospace markets. Eaton has hitherto been regarded as an automotive and truck component manufacturer.

The company has also resorted to timely acquisitions to expand its global reach. Its financial strength allows for such strategic buys. In the third quarter, the company acquired Canada based IE Power Inc., a provider of high power inverters and Germany based E. Begerow GmbH & Co. KG, a liquid filtration solution.

We believe Eaton’s overseas presence and its capacity to supply diversified power accessories to the aerospace industry have placed it in an advantageous position. As per industry-wide traits, global commercial aerospace is expected to grow substantially in the next couple of decades.

Eaton Corporation currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company competes with ITT Corporation ( ITT - Analyst Report ) and Parker Hannifin Corporation ( PH - Analyst Report ) .

Cleveland, Ohio-based diversified power management company Eaton Corporation is a leading supplier of power accessories in the aerospace industry and has customers spanning 150 countries.