Recently I blogged about the likelihood of M&A activity impacting the market for process level measurement and inventory tank gauging solutions. How little did I know that my prophetic blog would be so right on the mark? Marsh Bellofram has recently acquired the product line assets of King Engineering Corp.
King will likely leverage existing Marsh Bellofram technology and resources to expand beyond King’s own line of hydrostatic, conductive and capacitance level and tank gauging solutions. It is also likely that King will now focus more of its efforts outside its core sanitary market segments such as food, dairy, pharmaceutical, etc.
Okay, so Marsh Bellofram is not a supplier of level measurement devices, although they do provide pressure gauges, and this is not a direct case of one level supplier acquiring another; but it does confirm my belief that more consolidation is coming to the industry.
If tangentially related companies such as Marsh Bellofram see the benefits of expanding their market coverage by acquiring a level and tank gauging company such as King, then I find it logical that level and/or tank gauging suppliers will see the benefit, both as an offensive and defensive strategy, of acquiring other level and/or tank gauging supplier(s). Such an acquisition should be completed if it would help round out a product/technology portfolio, provide access to new market or customer segments, provide new technology such as network connectivity and/or provide some level of best in class service or support capabilities.
Companies are increasingly facing pressure (internal as well as external) to grow revenues and gain market share in order to survive and thrive in their respective markets. Mergers and acquisitions, at least intelligent ones, can be seen as an effective tool to meet growth MBOs and help a company to not only survive but thrive.
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