With a bid to expand its business in the Asia-Pacific region, Rockwell Automation Inc. (ROK - Free Report) completed the purchase of medium voltage drives business of China-based Harbin Jiuzhou Electric Co., Ltd. for roughly $83 million. The business will be incorporated within the Automation Control Products & Solutions operating segment of Rockwell.
Jiuzhou Electric mainly focuses on research and development, manufacturing, sales and services of high power, electrical and electronic equipment. It offers medium voltage drives, direct current power supplies, switch gear and wind inverters.
Jiuzhou Electric serves a varied customer base including the electric power, petrochemical, steel, metallurgy, municipal, cement and construction industries. For seven years, it has been Rockwell’s contract manufacturer.
Rockwell decided to purchase medium voltage drives business of Jiuzhou Electric earlier in August this year. The medium voltages drives help in maximizing asset availability as well as manage energy control.
With this acquisition, Rockwell will be able to design, engineer as well as manufacture medium voltage drives and power solutions. In addition, it will be able to cater to a much wider customer base of the entire Asia-Pacific region, thereby fortifying its presence in the region’s motor control market.
The ever expanding customer base in the Asia-Pacific region has resulted in a soaring wave of demand for the efficient medium voltage drives. Given the higher demand for Rockwell’s medium voltage drives, the business is growing significantly.
Rockwell’s third-quarter fiscal 2012 earnings were $1.33 per share, ahead of the Zacks Consensus Estimate of $1.31. Total revenue soared 3% year over year to $1.560 billion, missing the Zacks Consensus Estimate of $1.598 billion.
Based in Milwaukee, Wisconsin, Rockwell Automation is an original equipment manufacturer (OEM) of industrial automation equipment, application specific integrated software and consulting design services. The company is a leading global provider of industrial automation power, control, and information solutions.
Rockwell, however, faces stiff competition from leading companies like Siemens AG , ABB Ltd. (ABB - Free Report) and Emerson Electric Co. (EMR - Free Report) . The company retains a short-term Zacks #3 Rank (Hold). We have a long-term Neutral recommendation on the stock.