Pinto makes an important point about Rockwell and ICS Triplex

In his latest newsletter, Jim Pinto makes an important point about the acquisition of ICS Triplex. He says, "Now, what does this say about Rockwell Automation? Did they just buy a fattened-up pig? Just a few months ago they bought an Ireland-based Systems Integrator for an exorbitant price. Now another questionable acquisition in England for a price that is admittedly "dilutive to earnings in the first fiscal year". Would you like to bet that the "dilutive earnings" continues? Unless Rockwell changes the game and chops it up - which it undoubtedly will. Hmmmm..." Hmmm, indeed. Good question, Jim. Brings up an interesting set of questions about other companies in the same general boat as ICS Triplex. There are lots of these little conglomerates that bought an instrumentation or automation company or two...and don't really know what to do with them. And there are some really big players that are having much more trouble digesting their acquisitions and figuring out what to do with them than they either thought or even than it might appear. GE is having wonderful fun figuring out how to build a full automation company with GE Sensing, GE Infrastructure, GE Fanuc and GE Water (I am probably well behind the times on what they actually are called now, but it is just so hard to keep up-- and if it is hard for the chief editor of the biggest automation magazine to keep up, ask yourselves how hard it is for end users---) and it will be either years yet before they figure out how to compete with Emerson et al. or they'll give it up as a bad job and sell off the pieces. Danaher is going through the same issues, although they are much better at chop-and-change than nearly anybody else, since they have made nearly all their growth through acquisition. ThermoFisherScientific (that's the new name) is also going through acquisition and merger hell. There are others: you know who you are...and so do your end user customers. I'm going to steal some of Keith Larson's thunder...his "Windup" column for July talks about the effects of this consolidation/deconstruction on the end users...and he makes some interesting and important points. One of the things our recent research has found is that the continued success of an acquired company can be correlated with whether the previous brand is continued to be marketed after the acquisition. In other words, the end users appear to get mad when somebody buys one of their favorite companies and discards the brand or trade names in favor of the new company. And they vote with their feet, early and often, as we say here in Chicago.