ABB Expands Robotics Capabilities With SVIA Acquisition

ABB Ltd. (NYSE:ABB) expanded its robotics operations with the acquisition of SVIA automation solutions, a leading player in the burgeoning market of robot automation cells for machine tending. Financial details of the transaction were kept under wraps.

Headquartered in Sweden, SVIA creates automated solutions for machine tending processes. It uses robots to feed components to lathes and mills, as well as to secondary processes like part marking, assembly and washing. With a portfolio of more than 800 machine-tending cell solutions, SVIA is an impressive addition to ABB’s Internet of Things, Services and People (IoTSP) capabilities.

ABB will integrate SVIA into its robotics business in its Discrete Automation and Motion division, and will make the latter its global application centre for machine-tending.

SVIA’s solutions integrate robotic automation to enhance the flexibility, productivity and quality of manufacturing. Combined with ABB’s capabilities, the company will be able to deliver a distinctive set of value proposition to industrial customers across the globe.

The deal will lend immense breadth to ABB’s Robotics business unit, specifically its machine-tending portfolio, with a more extensive range of advanced and vision-integrated applications that will cater to automotives, plastics and electronics industries.

SVIA’s machine-tending cell systems, combined with ABB’s software, will significantly reduce engineering costs pertaining to installation of new machines. The new range of offerings will be beneficial to machine OEMs (original equipment manufacturers), established CNC (Computer Numeric Control) machine users, as well as its own distributors.

Robotic machine-tending automation is witnessing a mounting interest, which is driven by the need to optimize productivity and flexibility, as production moves towards smaller quantities of more varied products. The automated systems also protect workers from fast-moving machinery.

ABB has been suffering in recent times due to macroeconomic issues like geopolitical tensions, volatility in oil prices as well as currency fluctuations. Softness in industrial production and the oil and mining industries, coupled with a projected slowdown, particularly in the emerging markets, has compelled the company to cut costs and increase efficiency.

However, in the long run, we expect the company’s three major customers in utilities, industry, and transport & infrastructure to drive growth. Apart from this, positive development in electricity value chain, rapid progress of Internet of things, services and people, an anticipated Industry 4.0 revolution and a surge in energy-efficient transport and infrastructure bode well for the company in the long term.

ABB currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Franklin Electric Co., Inc. (NASDAQ:FELE) , Plug Power Inc. (NASDAQ:PLUG) and ESCO Technologies Inc. (NYSE:ESE) , each holding a Zacks Rank #2 (Buy).