Data center products a key factor in ABB purchase

An IMS Research analyst sees advantages after Thomas and Betts acquisition by ABB.

02/10/2012


IMS ResearchABB’s proposed acquisition of Thomas and Betts Corp. will help continue its expansion into the data center power and cooling industry, a market worth more than $15 billion according to the analyst firm IMS Research. The announcement comes on the heels of ABB’s tie-up with Newave S.A., a European provider of uninterruptible power supplies (UPS).

Data center products are a small, but important, portion of Thomas and Betts’ total electrical business. Jason dePreaux, a research manager for IMS Research explains, “Thomas and Betts owns multiple brands that play in the UPS, power distribution, and data center service areas. These offerings will extend ABB’s reach further into data centers, a market of considerable importance for other heavyweights like Schneider, Emerson, Eaton, and GE.”  

The deal values Thomas and Betts at nearly 10 times its 2011 earnings. Other high profile acquisitions in the area have assigned even higher worth to companies. Emerson outbid ABB for Chloride Group in 2011, when it paid $1.5 billion; over 20 times Chloride’s earnings.

dePreaux believes acquisitions like this are common to this industry because of its growth potential and the difficulty for new companies to break into this market. “While the amount of data created and shared worldwide is expanding at a break-neck pace, the evolution of power and cooling infrastructure to support this ‘digital universe’ is more measured. Data center facility managers tend to be conservative and risk-adverse; brand recognition is critical.

Also, local supplier relationships are important owing to the levels of customization required. This creates a significant barrier for new entrants to the power and cooling market and makes acquisitions the preferred route to get into the game. The data-center industry has been completely re-shaped by acquisitions over the past 5-10 years, which have yet show any signs of slowing down, says dePreaux.”

According to dePreaux, “ABB buying T+B was not primarily motivated by the data center aspect; but it must have sweetened the deal.”



The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Pipe fabrication and IIoT; 2017 Product of the Year finalists
The future of electrical safety; Four keys to RPM success; Picking the right weld fume option
A new approach to the Skills Gap; Community colleges may hold the key for manufacturing; 2017 Engineering Leaders Under 40
Control room technology innovation; Practical approaches to corrosion protection; Pipeline regulator revises quality programs
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Power system design for high-performance buildings; mitigating arc flash hazards
VFDs improving motion control applications; Powering automation and IIoT wirelessly; Connecting the dots
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me