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Emerson Boosts Portfolio with Strategic Buyout; Shares Gain

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Global manufacturing and technology company, Emerson Electric Co. (EMR - Free Report) recently announced that it is expanding its portfolio in advanced flow measurement and control technologies, with the acquisition of FMC Technologies, Inc. (FTI - Free Report) ’s Blending & Transfer Systems business. Following the buyout, the company’s shares were up by 4.01% to close at $53.39 as on Nov 9.

FMC Technologies is a leading provider of blending and transfer solutions. The company offers its services across industries such as lubricants, greases, fuels, additives and chemicals.

Per the deal, the acquired Blending & Transfer Systems business will join Emerson’s Flow Solutions segment. This acquisition will augment Emerson’s product and software portfolio, along with solving critical problems related to the refining and chemical-end markets. The transaction will also enable Emerson improve its operating performance.

On Aug 18, the company inked an agreement to purchase Pentair Valves & Controls, a business unit of Pentair plc (PNR - Free Report) for $3.15 billion. Integrating Pentair’s Valves & Controls business will allow Emerson to bolster its foothold in control, isolation, pressure relief valves and actuation business lines. It is trying to strengthen its automation portfolio and Pentair Valves & Controls is a strategic fit.

Also, the company entered into an agreement to buy leading non-intrusive corrosion monitoring technologies provider, Permasense Limited. The buyout will fortify Emerson’s footprint in the integrity and corrosion management solutions business. Post acquisition, Permasense will be integrated with Emerson’s Rosemount portfolio of analytical technologies. This deal will improve Emerson’s Roxar intrusive corrosion monitoring and non-intrusive sand management systems.

Headquartered in St. Louis, MO, Emerson offers a wide range of products and services in the areas of process management, climate technologies, network power, storage solutions, professional tools, appliance solutions, motor technologies, and industrial automation. The company has a keen eye for acquisitions which are expected to be conducive to its core business. It is currently focusing on buyouts to bolster its core platforms including Automation Solutions and Commercial & Residential Solutions by redeploying the cash proceeds from divestitures.

Emerson currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same sector includes II-VI Incorporated , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

II-VI Incorporated has a forward PE of 25.93x. Over the trailing four quarters, the company beat estimates on all occasions with a positive average surprise of 39.80%.

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