by Jared Weiner | 03/30/2021

 

What Happened?

AMETEK announced on Monday that it had acquired Magnetrol International and two other companies―Crank Software and EGS Automation―for a total of approximately $270 million. Both Magnetrol and Crank will join AMETEK’s Electronic Instruments Group, while EGS will become part of the company’s Electromechanical Group.

VDC’s View

The addition of Magnetrol’s extensive portfolio of level measurement and flow control products complements AMETEK’s existing range of devices provided by AMETEK Drexelbrook (level) and Solartron ISA (flow). Magnetrol is among the leading suppliers of several technologies commonly used for level and/or flow measurement, including guided wave radar transmitters, magnetic level indicators, and mechanical float gauges.

The guided wave radar (GWR) segment is among the fastest growing product categories within the process level measurement market, so the addition of Magnetrol’s line of Eclipse GWR transmitters will help AMETEK capitalize on the growth expected to be driven by this segment. Magnetic level indicators and mechanical float gauges are mature technologies that will not drive as much growth as the GWR segment; however, both will remain broadly deployed in a wide range of applications, and, more importantly, both fill gaps in AMETEK’s portfolio. The addition of Magnetrol’s business will also give AMETEK a stronger foothold in the energy/power generation and petrochemical markets, among others, significantly expanding AMETEK’s industry reach.

Portfolio breadth is especially critical in a market such as this, with seemingly countless combinations of deployment requirements and dozens of viable measurement technologies for any given application. Furthermore, industrial organizations commonly deploy several different classes of process instrumentation devices alongside one another, with many operating environments also featuring pressure and temperature sensors in addition to the aforementioned devices for flow and level measurement. Such organizations often prefer to use a single automation supplier whenever possible, so suppliers that also offer a broad portfolio of adjacent products often have an advantage over competitors that only serve a single market segment. Though the end-to-end offerings of global automation suppliers such as Emerson, Endress+Hauser, and Siemens still exceed those of AMETEK, the addition of the Magnetrol portfolio will help close that gap.

Looking Ahead

Much of Magnetrol’s revenue is generated by older technologies, so the addition of this portfolio will not be a magic bullet for AMETEK in the process instrumentation market. The fastest growing technology segment within the process level measurement market, non-contact radar, remains a critical gap, though Magnetrol did recently introduce a lower-cost non-contact radar transmitter using 26GHz pulse burst technology. Still, the market leaders within this segment―which include Endress+Hauser, Krohne, Siemens, and VEGA Grieshaber, among others―offer devices featuring the more technically advanced 80GHz transmission frequency. Both AMETEK and Magnetrol also have limited penetration within the solids and powders portion of the level measurement market.

These acquisitions underscore AMETEK’s willingness to invest in and expand its product porfolio to drive market growth. However, the company’s long-term success in the process instrumentation market will ultimately depend on its ability to continually introduce innovative products capable of successfully competing in new market segments against established industry giants.

VDC explored these topics and more in our recently published reports, The Global Market for Process Level Measurement of Liquids and The Global Market for Process Level Measurement of Solids. Please visit our website or contact us for more details!