ABB will use cash reserves and proceeds of its US$4.8 billion robotics business sale to SoftBank to fund its $5.5 billion acquisition of English process equipment and technology company, Rotork.
Bath-headquartered Rotork is a 70-year-old manufacturer and engineering company that turned over about £777 million last year, up 3% on the previous 12 months. Its order intake rose 5.2% year-on-year to £782.6 million.
The company cites mining and metals among growth target markets that “continue to grow faster than underlying end markets … led by customers’ automation, electrification and digitalisation initiatives”.
Its chemical, process and industrial vertical generated £223.4 million of sales last year, up 9% yoy, with “strength in specialty chemicals, critical HVAC [heating, ventilation and air conditioning], mining and marine” generally contrasting with “subdued core process markets”.
“Target segments offering plus-8%-per annum yoy growth include upstream electrification, LNG, critical HVAC, mining, marine, water infrastructure [and] alternative energy”.
ABB said Rotork’s mission-critical intelligent flow control and instrumentation products were “highly complementary” to its existing automation portfolio and would strengthen its field-device layer.
Rotork would increase ABB’s overall revenues by circa-3%, and add 12% to its automation business revenues, while being “immediately accretive to ABB’s operational EBITA margin”.
“The mix of ABB’s automation business would be improved through increased exposure to higher-margin products, services and lifecycle revenues,” ABB said.
“The transaction is expected to further strengthen ABB’s focus on electrification and automation and expand its Automation business area’s offering for large and complex infrastructure and industries.”
ABB said the deal, expected to close in the first half of 2027, would be funded from its c$5.8 billion of available cash and marketable securities, plus committed bank facilities. Divestment of its robotics business to SoftBank was expected to deliver about $4.8 billion net cash proceeds in the current half.
“With our strong balance sheet ABB has room for additional M&A and execution of its announced share buyback program,” CEO Morten Wierod said.
Barclays is ABB’s financial adviser and Freshfields its legal counsel on the transaction.
