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Omron buys Scientific Technologies for $94 million

An Omron Corp product story
Edited by the Engineeringtalk editorial team Apr 27, 2006

Omron to buy Scientific Technologies for $94 million in bid to grow its safety business aggressively, from $85 million in fiscal year 2005 to $255 million by 2008.

Omron is set to buy Scientific Technologies for $94 million plus net cash and working-capital adjustments.

The transaction, which does not include the purchase of ST's automation products group, was approved by both companies' boards of directors.

Omron's industrial automation business (IAB), which already leads the Japanese safety devices market, should capture a key position in North America as a result of this acquisition.

It will become a major, global player in a $940 million global safety device market growing 15% a year due to a rising trend for corporate social responsibility that stresses not only improved productivity but also workplace safety.

In line with the automation and globalisation of production processes, manufacturers have increased their focus on safety, quality and the environment.

IAB as a primary supplier to industrial workplaces has responded accordingly.

In April last year, it established a dedicated safety devices division.

It enhanced its safety devices lineup of components and networks, and boosted its capabilities and safety-design consulting services.

Now, with the acquisition, it plans on growing its safety business aggressively, from $85 million in fiscal year 2005 to $255 million by 2008.

"Together, Omron IAB and ST will create a global equipment supplier of safety, sensing and control technologies that satisfies customers' demands for not just labour productivity but also product quality, employee safety and environmental friendliness", said Fumio Tateisi, IAB President and Executive VP of Omron.

"By acquiring ST, we will be able to offer a wider range of cutting-edge safety products and consultancy services to our customers".

"ST's comprehensive suite of products will benefit from Omron's established international distribution channels, overseas sourcing relationships and efficient manufacturing capabilities".

"Our leadership position in the safety market and extensive regional sales and distribution channels in North America will bolster Omron's reach within this important market".

Joseph Lazzara, President and CEO of ST, said: "The acquisition will preserve and enhance ST's history of product innovation and customer service".

The transaction remains subject to certain closing conditions including approvals by regulatory bodies and shareholders of both companies.

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