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Rockwell Automation (ROK) Signs Deal to Acquire Clearpath

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Rockwell Automation Inc. (ROK - Free Report) announced that it has entered into an agreement to acquire Clearpath Robotics Inc., a leader in autonomous robotics for industrial applications. The acquisition is expected to boost Rockwell Automation’s end-to-end autonomous production logistics solutions, enabling a safer and more efficient manufacturing environment for customers.

Based in Ontario, Canada, Clearpath was founded in 2009. It began by providing robotics technology to international research and development markets. In 2015, the company launched its OTTO Motors Division.

Autonomous mobile robots (AMRs) are the upcoming frontier in industrial automation and transformation. According to Interact Analysis, the market for AMRs in manufacturing is projected to grow around 30% annually over the next five years. It is estimated to reach a market size of $6.2 billion by 2027.

The deal is anticipated to contribute a percentage point to Rockwell Automation's revenue growth in fiscal 2024.

Clearpath's OTTO Motors Division provides AMRs as well as fleet management and navigation software, both of which significantly boost throughput. Furthermore, it reduces expense by ensuring that the components and subassemblies are available when needed and by transporting finished goods to a truck or warehouse after completion.

The addition of OTTO Motors' AMR capabilities to Rockwell Automation 's strong ongoing relationships in fixed robotic arms, solutions and historic expertise in programmable logic controllers is likely to result in a solid portfolio of advanced material handling solutions.

The companies intend to collaborate to simplify the challenging and labor-intensive task of transferring materials and product through an organized and secure system. This would optimize operations across the whole production facility.

The deal is expected to close in the first quarter of fiscal year 2024, which is subject to customary regulatory approvals. Clearpath will report to the Rockwell Automation’scompany’s Intelligent Devices operating segment.

Rockwell Automation will use a portion of the proceeds from the sale of its investment in PTC Inc. to fund this transaction.

ROK has been gaining from the acquisition front. The company remains focused on buyouts that will augment its information solutions and high-value services offerings and capabilities, while expanding global presence or enhancing process expertise.

The company reported adjusted earnings per share of $3.01 in third-quarter fiscal 2023, missing the Zacks Consensus Estimate of $3.19. However, the bottom line improved 13.2% year over year on higher sales. Total revenues were $2,239 million, up 13.7% from the prior-year quarter. The top line missed the Zacks Consensus Estimate of $2,295 million.

Price Performance

In the past year, Rockwell Automation’s shares have gained 28.9% compared with the industry’s growth of 26.6%.

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Zacks Rank & Stocks to Consider

Rockwell Automation currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Caterpillar Inc. (CAT - Free Report) , Astec Industries, Inc. (ASTE - Free Report) and Eaton Corporation plc. (ETN - Free Report) . CAT and ASTE sport a Zacks Rank #1 (Strong Buy) each and ETN has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has an average trailing four-quarter earnings surprise of 18.5%. The Zacks Consensus Estimate for CAT’s 2023 earnings is pegged at $19.81 per share. The consensus estimate for 2023 earnings has moved north by 11.4% in the past 60 days. Its shares have gained 51.6% in the last year.

Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $2.81 per share. The consensus estimate for 2023 earnings has moved 4% north in the past 60 days. ASTE’s shares have gained 22.8% in the last year.

The Zacks Consensus Estimate for Eaton’s 2023 earnings per share is pegged at $8.80. The consensus estimate for 2023 earnings has moved 4% north in the past 60 days. It has a trailing four-quarter average earnings surprise of 3%. Shares of ETN have rallied 68.8% in the last year.

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