Automation and Power Acquisitions and Growth

Acquisitions in the automation space have hit early and often so far this year. ABB is continuing to fill out its portfolio in power distribution and smart grid areas. It's made so many moves in the past month, I can barely keep up. Adept Robotics surprisingly has entered the acquisition game expanding its food automation portfolio. The third acquisition bolsters a company in training for process operators. Then GE Intelligent Platforms acquired SmartSignal in what I regard as a surprise. GE investments that touch on my coverage area have been part of GE Energy. This is the first GE IP investment in quite some time.

I'm not surprised at all by the ABB acquisitions. They fill out a strategic direction that has been publicized. Adept has had corporate financial problems for quite some time. It's good to see that evidently the financial situation has stabilized and that it has money for an acquisition. It's also heartening to see GE invest in the automation arm.

In the first *ABB* acquisition, it announced it has agreed to acquire the business of Insert Key Solutions (IKS), a privately owned specialist software provider, adding IKS' solutions to its recently acquired Ventyx software portfolio. The move is said to create a comprehensive solution set for asset and work management, maintenance optimization, and equipment reliability.

Based in Chadds Ford, Pennsylvania, in the United States, IKS specializes in delivering software solutions for process improvement, increased equipment reliability and operational performance in power generation plants, and transmission and distribution networks. The company has an extensive customer base in the thermal and nuclear power sectors, and a staff of 50 people.

ABB plans to retain the IKS team and will place IKS executives in key roles within the Ventyx team responsible for Asset Suite, eSOMS (asset and operations management software), and IKS solutions.

The second acquisition is Obvient Strategies Inc., a privately owned specialist software provider, also adding Obvient's solutions to the Ventyx software portfolio. Obvient has offices near Atlanta, Georgia, in the US. The transaction is said to further enhance ABB's software offering for asset management, power distribution automation and smart grid applications.

Obvient offers software and services for industries and utilities with geographically dispersed assets. The company's business intelligence software collects, analyzes and reports critical real-time as well as periodic information. This supports decision making and helps users to optimize operations. As well as helping to manage complex operations, the solutions also reduce operating costs and improve asset reliability. Obvient's products compile the power transmission and distribution sector's best business practices into prepackaged solutions. This enables companies to monitor and manage their distributed assets more effectively, on a real-time and event-driven basis.

ABB plans to retain the Obvient team and place its executives in key roles within the Ventyx product management organization. The company has offices near Atlanta, Georgia, and a staff of 40.

Before I could post this, ABB announced another financial move, this time an investment.

It has invested $10 million in San Francisco-based ECOtality, a clean electric transportation and storage technologies company, to enter North America's electric vehicle (EV) charging market and provide ECOtality with a strong global ally in power delivery systems.

ECOtality will use the investment to foster its expansion and finance initial requirements of the EV Project, a program to develop electric vehicle infrastructures in 16 major US cities funded by a $115 million grant from the US Department of Energy (DOE). The project involves installation of more than 15,000 chargers to support the deployment of 8,300 electric vehicles.

In addition, the companies have signed an agreement establishing ABB as the preferred supplier for ECOtality's power electronics and component parts in North America. The companies will work together to develop charging technologies for electric vehicles that incorporate the advanced consumer interface and billing functionalities of ECOtality's Blink EV charging stations. Through its smart grids industry segment initiative, ABB will contribute its expertise from several projects in Europe involving integration of EV charging solutions.

*GE Intelligent Platforms* has completed the acquisition of SmartSignal, a privately-held, analytics software company based in Lisle, Illinois. SmartSignal specializes in providing Remote Monitoring & Diagnostics solutions to the Power Generation, Oil & Gas and other industrial sectors. SmartSignal is a leading provider of predictive diagnostic software and monitoring services used to anticipate, prevent, and avoid equipment failure. The company has more than 40 product and technology patents, and has won more than 25 awards for product excellence.

SmartSignal detects and identifies abnormal equipment behavior and provides exception-based notifications of developing problems along with diagnoses and prioritizations. Its solutions are device-agnostic and are found on equipment from GE, Siemens, Rolls Royce, Alstom, Flowserve, Waukesha, Byron Jackson, Cooper-Bessemer, and others.

*GSE Systems Inc.*, a global provider of real-time simulation and training solutions to the power, process, manufacturing and government sectors, announced the acquisition of EnVision Systems Inc., which provides interactive multi-media tutorials and simulation models, primarily to the petrochemical and oil & gas refining industries.

At closing, GSE paid $1.2 million in cash to the shareholders of EnVision. In addition, if EnVision attains certain revenue targets for the four-year period ending December 31, 2014, the shareholders of EnVision could receive up to an additional $3.05 million.

EnVision, with headquarters in Madison, NJ and an office in Chennai, India, was founded in 1991. EnVision's tutorials and simulation models serve the rapidly growing entry-level training market for the oil & gas refining and specialty chemicals industries. EnVision's products provide a foundation in process fundamentals and plant operations and interaction. With this knowledge base, users may then graduate to the full-scope, high-fidelity, real-time simulators provided by GSE. EnVision has completed more than 750 installations in over 28 countries and its approximately 130 clients include Shell Oil Company, BP, Total and Chevron. EnVision will operate as a wholly-owned subsidiary of GSE and be re-named GSE EnVision, Inc.

*Adept Technology Inc.*, a provider of intelligent vision-guided robotics and autonomous mobile solutions, announced that it has entered into an agreement to acquire privately held InMoTx, a provider of industry leading technology for the global food processing market. With operations based in Denmark, InMoTx is said to enhance Adept's position in the food packaging industry through a broad portfolio of intellectual property dedicated to inspecting, sorting, grading, and hygienically packaging unwrapped, natural products improving food safety by eliminating the risk of contamination introduced by manual handling.

Under the terms of the agreement, Adept will acquire InMotx in a cash and stock transaction valued at up to $4.3 million, which includes $1.5 million in cash, subject to adjustment, 200,000 shares of Adept common stock and earnout provisions based upon the revenues of the acquired business and related products over the three years following the acquisition. InMotx' founder and chief technology officer will be granted up to 100,000 shares of Adept common stock contingent on his continued employment with Adept for three years following the acquisition. The acquisition is subject to customary closing conditions and is expected to be completed by mid-January, 2011. The transaction is expected to be accretive in Adept's fiscal 2012 year.

And in other good news in the industry:

*Advantech*, an international supplier of industrial PCs and automation, adopted a board resolution to acquire 10,427 pings of Linkou Industrial Park at NT$145,000 per ping, or approximately NT$1.512 billion in total. The new park will be a fully functional campus and the second R&D and manufacturing headquarters of Advantech in Taiwan.

In light of the healthy growth and promising prospects for the IPC industry, Advantech is growing rapidly and doubling its revenues every five years. At the same time, production and warehousing facilities in Taiwan have faced space shortages and it is anticipated that the R&D office will also be out of space within the next five years. Therefore, Advantech plans to set up this second headquarters in Linkou. The new campus will become an important base for Advantech manufacturing and R&D over the next ten years and the location of the new park is expected to attract talent from Hsinchu and Taoyuan.

The campus park will be constructed systematically and in stages and include a factory, an R&D center, and an office building. The new campus will also provide a venue for an exchange of global talent and a training center. The long-term development plan includes four major elements, including a manufacturing and warehouse distribution center, an R&D building, stationed staff quarters / training center / convention center, and new business incubation centers.

ABB Makes More Smart Grid and Energy Moves

ABB is not abandoning its process automation strengths, to be sure, but energy and power are obviously the company's sweet spot right now. Here are two recent announcements.

ABB is expanding its Raleigh, N.C. facility to include a technology center devoted to smart grid, known as the Smart Grid Center of Excellence. ABB is making an initial investment of $10 million in the technology center.
ABB will initially house the Smart Grid COE in its existing Centennial Campus facilities at North Carolina State University (NCSU) in Raleigh, with plans to build and lease out space on the Centennial Campus for a permanent facility nearby. The center will initially house several full-time dedicated ABB employees. These positions will be supported by the state of North Carolina, after the state’s Job Development Investment Grant (JDIG) committee recently approved grants for new engineering positions in Wake County.

“As the world’s largest supplier of power transmission and distribution systems, ABB has always been on the leading edge of power technology,” said Enrique Santacana, ABB region manager for North America. “This initiative reaffirms ABB’s commitment to the smart grid and positions us to play an even larger leadership role in its development and implementation.”

Santacana said ABB’s long history with the state played a key factor in Raleigh’s selection. “ABB has a positive, long-standing relationship with North Carolina, and Raleigh in particular,” he said. “The combination of North Carolina’s support for technology innovation, our great partnership with N.C. State University, the abundance of engineering talent, support from state officials, and the Triangle’s growing reputation as a hotbed of smart-grid activity make Raleigh the right place to make this investment.”

The Smart Grid Center of Excellence (COE) will include a testing and development laboratory, a verification center to certify customer solutions before deployment, and a demonstration center that will showcase ABB’s smart grid technologies and collaborative partnerships. ABB will work closely with the FREEDM Systems Center, a strategic partner of ABB’s which is also based on Centennial Campus of N.C. State. The FREEDM Systems Center was established in 2008 by NSF to develop smart grid technology based on advanced power electronics and information technology.

“This is a very important development,” said Dr. Alex Huang, Progress Energy Distinguished Professor of Electrical Engineering, FREEDM Systems Center. “This new initiative by ABB will further enhance our collaboration. We are excited that ABB has initiated this new Smart Grid Center of Excellence and we look forward to collaborating with ABB right here in our own backyard.”

ABB will operate this smart grid technology center, which ABB officials believe will enable collaboration and partnerships with several local entities in the power industry. This includes the FREEDM Center, local utilities such as Duke Energy and Progress Energy, and other local metering and communications companies.

“It is clear the Raleigh and Triangle region, and North Carolina in general, is gaining momentum and quickly becoming a national smart grid hub – with so many energy companies and utilities bolstering their presence here on top of ongoing world-class research-and-development and educational initiatives coming from N.C. State,” said Adrienne Cole, Executive Director of the Raleigh Economic Development Council.

The site is already home to the North America headquarters of ABB’s Power Products and Power Systems divisions as well as one of eight global corporate research centers that is focused on advanced power system technology.

ABB also announced that it and General Motors have signed a non-exclusive memorandum of understanding to cooperate on a research and development project that will investigate uses for electric vehicle batteries once their useful life in the vehicle is over.

The project will examine the potential of reusing spent lithium-ion battery packs from GM’s electric car, the Chevrolet Volt, as a means of providing cost-effective energy storage capacity, which will improve the efficiency of electrical systems as they evolve into smart grids.

“Future smart grids will incorporate a larger proportion of renewable energy sources and will need to supply a vast e-mobility infrastructure – both of which require a wide range of energy storage solutions,” said Bazmi Husain, head of ABB’s smart grids initiative. “We are excited to explore the possibility of employing electric car batteries in a second use that could help build needed storage capacity and provide far-reaching economic and environmental benefits.”

According to GM, the Volt’s battery will still have significant capacity to store electrical energy, even after its automotive life.

"That’s why we’re joining forces with ABB to find ways to make the Volt batteries provide environmental benefits that stretch beyond the highway,” said Micky Bly, Executive Director of Electrical and Hybrid Systems, who announced the partnership at the EV Battery Tech conference in Troy, Michigan. “Our relationship with ABB will help develop solutions that optimize the full lifecycle of the Volt battery.”

Economical grid storage is often identified as a key “enabler” technology of smart grids that will drive the wider use of a variety of applications, including:

• managing the intermittency of wind and solar resources
• mitigating spikes in electricity demand
• providing backup power
• allowing cheaper off-peak power to be used during peak periods

ABB is currently at work on more than 20 projects around the world examining all aspects of the smart grid, from energy storage to network management, metering and communication, distribution automation and home automation systems.

Automation Products, video essay avoiding manufacturing decline

I can't believe we've reached the end of August. Kids are in school, soccer is in full swing, and I'm preparing for a very busy fall.

I must have tried a dozen times this weekend to upload this video to YouTube. AW crew got it up there faster than usual, though. Four ways to avoid manufacturing decline.

You can listen to the podcast version here or by clicking the link at the bottom of the post.

Emerson Global Users Exchange 2010 is rapidly approaching. Jim Cahill is beginning to highlight some interesting papers that will be presented. Three tough level control challenges  and Analysis of Automation System Modernization Alternatives.

Alright, all you inventive engineers. Here's a project for you. Airborne electricity is ripe for the picking.

Here's a Brief Guide to Life from Leo at Zen Habits. Very true. I practice most. Learning to do the others.

Speaking of life hacks, here's one for soccer referees, parents, coaches--and all the rest of you. How to Keep Your Cool.

Thanks to Carl Henning at the Profiblog, found a new industry blog, GridConnect.

The Manufacturing Enterprise Solutions Association (MESA) International today released Harnessing the Power of Metrics to Diagnose and Solve Business Problems, a white paper that illustrates a systematic approach for achieving the measurable business results demanded by enterprise managers.  MESA has leveraged the extensive experience of its membership to develop both a conceptual framework and real-world best practices that enable manufacturers to achieve—and demonstrate--performance improvement.

"Management often demands that operating groups or plant managers demonstrate performance improvements in terms of business improvements," says Steve Kaplan, Global MES Administrator for Murata Power Solutions and MESA Metrics Working Group Co-Leader.  "There are so many nuances to the process of diagnosing and solving problems.  For example, a supplier might think its shipping process is running smoothly when it is really triggering customer problems.  Mutual supplier/customer metrics' analysis can enable corrective action.  The team that assembled this paper provides a range of real-world examples like this and identifies common best practices for addressing such issues."

The paper is available now for MESA Members to download.

I heard about this technology and product on my recent trip to Minneapolis. Usually automation suppliers talk about making solar panels. Here's a different take, a solar position algorithm library.
Beckhoff Automation has released the TwinCat Solar Position Algorithm library. This function block permits the exact calculation of sun angles anywhere in the world at any time, without the use of sensors.
This block is designed for parabolic mirror and photovoltaic systems as well as for other solar power plant designs that automatically track the sun's position for optimum utilization of the sun's rays. The control algorithm, which calculates the zenith and azimuth angles of the sun with an impressive precision of ±0.001°, can also be used for other applications such as in building automation or with wind turbines for shadow flicker calculations.

The ISA100 Wireless Compliance Institute (WCI) has announced certifications of six ISA100.11a wireless devices as conducted for WCI by National Technical Systems, Inc. (NTS). I presume these tests are relative to the ISA-adopted (but not ANSI) 100.11a standard that is currently being re-worked by the committee.

ISA100.11a wireless devices that have completed certification include:
Honeywell
XYR 6000 Pressure Transmitters (Gauge, Absolute and Differential Pressure); Models STWA94L, STDW924/930/974, STGW944/94L/974/97L/98L
XYR 6000 Universal IO Transmitter; Model STUW700/701
XYR 6000 Temperature Transmitter with Digital Input Transmitter; Model STTW401
XYR 6000 Temperature Transmitter; Model STTW400
XYR 6000 Multiple Digital Input Transmitter; Model STXW500

Yokogawa
EJX B Series Differential Pressure and Pressure Transmitters

ABB has introduced an integrated PLC and robot controller for robot cell applications, offering powerful performance in a single unit. Combining ABB’s flexible AC500 PLC with its IRC5 robot controller, the newly integrated unit eliminates the cost and space of a separate PLC cabinet and greatly reduces the time associated with the set-up and operation of robotic production cells.

Rockwell Automation announced that it has announced an Enterprise Resource Planning (ERP) Integration Gateway application that allows plants to exchange transactions and execute business processes across plant-floor and business systems, in real-time. Typical types of information include quality, order planning and scheduling, as well as accounting of production costs and material usage.

The ERP Integration Gateway is delivered on the Rockwell Software manufacturing services bus, a key component of the Rockwell Software manufacturing operations platform. The manufacturing services bus provides a service-oriented architecture (SOA) framework for messaging between applications that is said to be secure, robust, scalable and highly available.

Automation Minutes 95

ABB Reorganizes

ABB is reorganizing its automation divisions to "align their activities more closely with those of its customers." The company expects these changes to enable it to better tap growth opportunities in service, expand its presence in the discrete manufacturing sector and better respond to the increasing demand for energy efficient solutions.

Effective Jan. 1, 2010, the business units currently in the Automation Products and Robotics divisions will be regrouped into two new divisions –- Discrete Automation and Motion, and Low Voltage Products. The Process Automation division will remain unchanged except for the addition of the instrumentation business from the Automation Products division.

"ABB's automation businesses with their focus on productivity and energy efficiency have tremendous scope for growth," said Joe Hogan, ABB's chief executive officer. "We have strengthened the market approach by grouping together businesses with similar customers, technologies and service models, which will help us accelerate the development of solutions for our customers."

The new divisions will be comprised as follows:

The new Low Voltage Products division includes businesses producing mainly low-voltage electrical equipment that is sold to wholesalers, original equipment manufacturers as well as system integrators, and has moderate service requirements. The division had 2008 pro-forma revenue of $4.8 billion and about 19,000 employees.

The new Discrete Automation and Motion division includes products and systems targeted at discrete manufacturing applications, such as robotics and programmable logic controllers (PLCs), and providing motion in plants, such as motors and drives. These businesses help customers to increase the productivity and energy efficiency of their assets. It also includes a significant offering for the renewable sectors of solar and wind, as well as the rail segment. The businesses sell mainly to original equipment manufacturers, system integrators and directly to end users, and require a more intensive, tailored level of service. The division had 2008 pro-forma revenue of $6.6 billion and also about 19,000 employees.

Process Automation will remain unchanged except for the addition of ABB's instrumentation business, currently part of the Automation Products division. The move will strengthen the division's process automation platform as instruments measuring temperature, flow, pressure, etc. are key to optimizing industrial processes. The division had 2008 pro-forma revenue of $8.4 billion and about 29,500 employees.

ABB intends to provide pro-forma orders, revenues and earnings before interest and taxes (EBIT) for the period 2007 to 2009 under the new structure when it reports its fourth-quarter results in February next year. The company will also update at that time the divisional guidance on its 2007-2011 targets, to align them with the new organization.

The reorganization of the automation businesses will be accompanied by several related leadership changes as of Jan. 1, 2010.

Tom Sjökvist, currently responsible for Automation Products, will become head of the new Low Voltage Products division. Sjökvist has provided successful leadership for the low-voltage business for many years and has driven the Automation Products division to new levels of profitability.

Ulrich Spiesshofer, currently responsible for Corporate Development on the Executive Committee, has been appointed to run the Discrete Automation and Motion division. Spiesshofer, who joined ABB in 2005, has led ABB's strategic growth initiatives such as its service activities, and has played a key role in managing the company's global footprint optimization efforts and its $2-billion cost take-out program.

Anders Jonsson, currently responsible for the Robotics division, will have an Executive Committee role with responsibility for continuing the implementation of ABB's current cost take-out program as well as the company's Global Footprint program, which aligns ABB's resources with the company's growth opportunities. Jonsson has successfully repositioned the robotics business for long-term profitable growth.

Veli-Matti Reinikkala remains head of the Process Automation division.