ITT Corporation (ITT - Analyst Report) recently announced that it has entered into an agreement to acquire Joh. Heinr. Bornemann GmbH (Bornemann Pumps) to further expand its highly-engineered pumps, systems and aftermarket capabilities to better serve the global oil & gas markets. The acquisition is expected to cost €206 million for ITT Corporation. Subject to regulatory closing requirements, the deal is expected to be completed by the fourth quarter of 2012.
Bornemann Pumps is a leading provider of highly engineered pumps and systems for the oil & gas industry. This acquisition is a strategic fit for ITT as it intends to expand in new markets. The superior displacement technology of Bornemann Pumps enables it to broaden its capabilities and help it to attain the leadership position in the ever growing oil & gas markets and other attractive key end markets.
Bornemann’s twin-screw technology in pumps and multiphase applications bodes well for ITT’s existing Industrial Process business and also compliments ITT’s existing Goulds Pumps brand while further expanding the company’s upstream oil and gas production.
ITT Corporation continues to expand its product portfolio and geographical presence through a number of strategic acquisitions. Earlier in 2010, ITT acquired Godwin Pumps in order to expand its global position in water, wastewater and industrial processes and compliments ITT’s existing Fluid Technology portfolio.
The company is also focusing on extending its footprint in the emerging markets. ITT broadened its footprint in Latin America through the acquisition of Canberra Pumps, thus enabling it to provide more products to the growing oil and gas and mining markets in the region.
In addition to serving the oil and gas market, Bornemann also serves the industrial, food and pharmaceutical sectors. Apart from strategic business match, both these companies also compliment each other with respect to their strong aftermarket capabilities and focus on emerging markets. For fiscal 2012, ITT Bornemann is expected to generate revenues of €115 million.
ITT currently holds a Zacks #4 Rank, which implies a short-term Sell rating on the stock.