Sensata (ST) pursues inorganic growth to expand its portfolio
In order to unlock new business opportunities and generate a constant income stream, Sensata Technologies Holding plc ST is actively pursuing a strategy of inorganic growth. The buyouts will allow the company to gain additional mileage in the fast-growing end-markets of clean energy solutions and to offer a full product suite for electrification and replacement of fuel applications. The acquisitions are also expected to help realize synergistic benefits in various industrial applications.
The company recently signed an agreement to acquire Spear Power Systems. Based in Grandview, MO, Spear Power Systems has made a name for itself with market-leading lithium-ion battery storage systems for land, sea and air applications since its inception in 2013. These cell-independent storage solutions offered exclusive battery management and monitoring. as well as innovative features such as reliability, high energy density and modular architecture.
The takeover of this lithium-ion battery storage system manufacturer will allow Sensata to extend the market leverage acquired through the previous acquisition of the Danish startup Lithium Balance and broaden its scope on the market for electrification and battery management systems.
Earlier this year, Sensata completed the acquisition of Xirgo Technologies Intermediate Holdings, LLC – a leading provider of telematics and data analytics – for $ 400 million. Since 2006, Xirgo has provided innovative wireless IoT communication devices for a wide range of applications in multiple markets. Its annual revenues are expected to exceed $ 100 million in 2021, with estimated revenue growth of more than 20% over the next several years.
The takeover of Xirgo’s high-growth business significantly accelerates Sensata’s Smart & Connected initiative. It strengthens Sensata’s position as a provider of data information to end-market transportation and logistics. The acquisition brings additional capabilities and strengthens its strategy to expand beyond original equipment manufacturers and address the broader fleet ecosystem. Sensata’s total addressable market for its smart and connected product offerings is expected to more than double to $ 15 billion by 2030.
Known as the pioneer of mission critical solutions, Sensata has a diverse portfolio of customized and unique sensor-rich applications, from automotive brake systems to aircraft flight controls that are used ubiquitously. These sensors are uniquely designed to meet complex engineering and operational performance requirements that help customers solve significant challenges in the industrial, heavy-duty, off-road and aerospace industries.
Sensata also has a rich portfolio of high voltage protection and battery management systems. The joint venture with Churod Electronics further extended its electrical protection capabilities for consumer applications. Sensata’s sensing solutions business has a strong and larger product portfolio to capitalize on attractive opportunities in the global multi-billion automotive sensor market. In addition, the company believes that its evolving portfolio and accretive customer base are the cornerstone of its long-term growth in a diverse set of markets.
As a leading provider of critical solutions, Sensata enjoys profitable operations. The company offers a streamlined product set, which helps eliminate redundant costs and provides greater pricing flexibility. It invests in cutting-edge technology that enables hybrid and electric vehicles to be more efficient, profitable, robust and safe. The company is expanding its electrification ecosystem to facilitate the smooth transition to electric vehicles as it aims to become a leading provider of sensor-rich critical hardware and software solutions.
Such timely acquisitions are likely to help Sensata better compete with other industry players such as Allied Motion Technologies, Inc. AMOT, Transcat, Inc. TRNS, and Watts Water Technologies, Inc. WTS.
Boom in infrastructure stocks will sweep America
A massive push to rebuild crumbling American infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.
The only question is, “Are you going to jump into good stocks early when their growth potential is greatest?” “
Zacks published a special report to help you do just that, and today it’s free. Discover 7 special companies looking to make the most of the construction and repair of roads, bridges and buildings, as well as transporting goods and transforming energy on an almost unimaginable scale.
Download FREE: How to Profit from Trillions in Infrastructure Spending >>
Click to get this free report
Sensata Technologies Holding NV (ST): Free Stock Analysis Report
Watts Water Technologies, Inc. (WTS): Free Stock Analysis Report
Transcat, Inc. (TRNS): Free Inventory Analysis Report
Allied Motion Technologies, Inc. (AMOT): Free Stock Analysis Report
To read this article on Zacks.com, click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.