Emerson Buys Management Resources Group - Analyst Blog

Emerson Electric Co EMR has acquired leading reliability consulting services firm, Management Resources Group, for an undisclosed amount. Through this buyout, Emerson intends to strengthen its Process Management division's asset management capabilities.

In business since 1987, Management Resources Group is a reputed firm which helps process plant owners and operators improve plant availability through successful implementation of site and corporate-wide reliability programs. The company is also a known brand in the community of process reliability professionals, given its proprietary project methodologies and in-depth knowledge of plant asset categories.

The strategic acquisition of Management Resources Group will not only complement Emerson's monitoring and predictive diagnostic technologies but will also enable Emerson to help customers resolve reliability problems and strengthen its asset-reliability consultation. Emerson is a leading provider of industry advisory services through offerings like innovative automation solutions. The above-mentioned takeover will help Emerson customers improve safety, boost plant uptime and ultimately reduce maintenance costs, fortifying Emerson's leading position.

Emerson intends to integrate Management Resources Group under its Process Management division. This division contributed 35.5% of the total revenue in fiscal 2013 and primarily provides intelligent control systems and software, measurement instruments, valves, and industry expertise.

Lately, Emerson has been relentlessly focusing on strengthening its core competence through the realignment of its business to generate better results moving forward. In keeping with this, on Monday May 19, the company divested its Connectivity Solutions (ECS) business, in an all-cash deal valued roughly $98 million, to Bel Fuse Inc.. The proceeds from the divestment are expected to be utilized for share repurchases in fiscal 2014.

Emerson currently has a Zacks Rank #3 (Hold). However, some better-ranked stocks in the sector worth considering at the moment include Pernix Group Inc. (PRXG), Willdan Group Inc. WLDN and Enersys Inc. ENS. Pernix and Willdan sport a Zacks Rank #1 (Strong Buy) while Enersys has a Zacks Rank #2 (Buy).

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