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Emerson (EMR) Buys Bio-G to Boost Biomanufacturing Efficiency

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Emerson Electric Co. (EMR - Free Report) recently completed the acquisition of Bioproduction Group (Bio-G), a developer of simulation, modeling and scheduling software for the biomanufacturing industry. Bio-G’s leading modeling and scheduling software solutions, complemented by Emerson’s proficiency in life sciences technology, will enable biomanufacturing companies to optimize the production of patient therapies. Terms of the acquisition were kept under wraps.

Bio-G’s Scheduling software will be integrated into Emerson’s Plantweb digital ecosystem. Combining analytics and modeling tools with automation and operations systems like Emerson’s DeltaV distributed control system and Syncade manufacturing execution system, the software will offer a unified view of operations, quality and corporate systems.

In addition, with Bio-G’s Real-Time Modeling System, Emerson will offer predictive analysis of plants’ operations. This, in turn, is likely to drive efficacy across the company’s manufacturing process. Notably, the modeling software will offer companies capacity engineering, debottlenecking and technology transfer analytics capabilities, helping them identify snags in manufacturing process and maximize production. This will also help in evaluation of results for any changes in the manufacturing process.

Existing Business Scenario

Emerson is well positioned to benefit from favorable global industrial end markets, as its core businesses hold dominant positions in markets tied to energy efficiency and infrastructure spending. Going forward, the company’s Automation Solutions segment is likely to benefit from broad-based demand across most key markets, strong Maintenance, Repair and Operations projects as well as ongoing small to mid-sized brownfield and expansion projects.

In the past month, the Zacks Rank #3 (Hold) stock has returned 5%, outperforming the industry’s rise of 2%.

However, over the past few quarters, Emerson has been experiencing rise in cost of sales. In the fiscal first quarter 2019 (ended December 2018), the company's cost of sales jumped 9% year over year. As a matter of fact, it expects inflation environment to persist in the quarters ahead, and plans to have more material containment on account of the same.

Key Picks

Some better-ranked stocks from the Zacks Industrial Products sector are Roper Technologies, Inc. (ROP - Free Report) , Regal Beloit Corporation (RBC - Free Report) and Brady Corporation (BRC - Free Report) . While Roper sports a Zacks Rank #1 (Strong Buy), Regal Beloit and Brady carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Roper delivered average positive earnings surprise of 4.96% in the trailing four quarters.

Regal Beloit pulled off average positive earnings surprise of 4.27% in the trailing four quarters.

Brady delivered average positive earnings surprise of 5.71% in the trailing four quarters.

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