Mergers and acquisitions, along with partnerships, have played an important role in the flowmeter industry over the past 30 years. Some acquisitions work out better than others. Sometimes it is challenging to merge two different company cultures, and deal with duplicate departments. Sometimes two companies have similar product lines, and they need to be merged or some products discontinued. Alternatively, an acquisition can boost a company’s product lines and provide it with new products that are vital to its customers.
Branding is one of the most challenging issues when companies merge. Most companies are heavily invested in their brand, and giving up a brand can both disappoint customers and cost sales. However, when two companies in a similar business merge, the product line has to be rationalized and the strongest brands are likely to win out. This is good in the long term, even if it causes short-term pain.
ExxonMobil
Handling company names is one of the greatest challenges in a merger or acquisition. When Exxon and Mobil merged in 1999, it put the two names together to form the duonym ExxonMobil. The company cited the need to compete with state-owned oil companies such as Pemex and Saudi Aramco as one major reason for the deal. They also cited the benefit of reducing duplicate operations, cutting costs, and gaining market share.
Exxon started out with the name “Standard Oil.” In 1911, Standard Oil was broken up into 34 separate companies. In 1926, Standard Oil of New Jersey began using the trade name Esso. This name was the phonetic pronunciation of the initials ‘S’ and ‘O’ that were the initial letters of the name “Standard Oil.” The company later ran into problems because it did not have the right to use the name “Esso” in all states. In 1973, Standard Oil of New Jersey renamed itself “Exxon Corporation” and adopted the brand name Exxon in all 50 states. This is how things stood until 1999 and its merger with Mobil. Esso is still used as a brand name in some countries outside the United States.
Honeywell Elster
Honeywell took a similar approach when it purchased Elster from Melrose Industries in 2015. The deal was valued at $5.1 billion. Honeywell simply called the resulting company “Honeywell Elster.” Part of what made Elster attractive to Honeywell was the opportunity to marry Elster’s metering solutions to its building controls and energy management business. Honeywell also saw synergies between Elster’s gas burner products and residential components and Honeywell’s Environmental and Combustion Controls business. Elster’s flowmeters and regulators also complemented Honeywell’s natural gas business.
Emerson
Emerson was founded by John W. Emerson in 1890. The company is based in St. Louis, Missouri, where it is known as Emerson Electric. Emerson is an interesting example to look at because the company has bought and sold so many companies over the years and has followed different branding policies with some of them.
Brooks Instrument. Emerson Electric bought Brooks Instrument in 1964 and sold it to American Industrial Partners in January 2008. Brooks Instrument retained its name throughout the process and is still known as Brooks Instrument today. It is not clear why Emerson decided to sell Brooks, although there may have been some duplication in product lines since both Brooks and Micro Motion, another Emerson company, make Coriolis flowmeters.
Micro Motion. Emerson Electric bought Micro Motion in 1984, seven years after it was founded by Jim Smith. It seems unlikely that the company could have envisioned the success of Coriolis flowmeters and Micro Motion at that time. Micro Motion kept its identity as a company for many years but today is an Emerson brand, though it still retains its headquarters in Boulder, Colorado. Emerson Micro Motion has been the leading supplier of Coriolis flowmeters worldwide for many years going back at least to 1993 and still maintains its lead today. One way that Emerson has remained the leader is by vigorously defending its patents and also by regularly introducing enhanced Coriolis flowmeter models that offer still better performance.
Daniel Industries. Emerson acquired Daniel Industries for $460 million in 1999 to bolster Emerson’s presence in the oil and gas industry. Daniel was founded in 1946 by Paul Daniel, who started his career in the oil industry in Southern California in 1915 at a refinery operated by Standard Oil Company. When out of work during the Great Depression, Daniel designed the now-famous orifice fitting to enable plates to be changed within the oil pipeline system without interrupting the flow of the oil or allowing significant leakage. A few years later he formed Daniel Orifice Fitting Company. By the time Daniel left active management in the mid-1960s, the company had more than 500 employees and the company’s product line included piston-controlled check valves, orifice flanges, and Simplex plate holders. In 1966, the board of directors changed the company’s name to Daniel Industries, Inc.
Daniel kept its name and brand identity during the time Emerson owned it. However, on July 12, 2021 Emerson announced a definitive agreement to sell its Daniel Measurement and Control Business to Turnspire Capital Partners by the end of Emerson’s fiscal year. The sale, announced as final on August 31, 2021, includes all of Daniel’s brand rights, facilities, intellectual property, and personnel, but does not include Daniel’s ultrasonic flowmeters, which remain with Emerson. The ultrasonic flowmeters have been branded Rosemount ultrasonic flowmeters.
FLEXIM. In August 2023, Emerson announced a definitive agreement to acquire its business partner FLEXIM during the 2023 fiscal year, which ended September 30. FLEXIM was founded in February 1990 in an old storefront during turbulent times in Germany following the fall of the Berlin Wall. Four graduates of Berlin's Humboldt University and the University of Rostock decided to take advantage of the new risks and opportunities by developing and manufacturing ultrasonic flow instrumentation. In 2005, the company opened its first U.S. facility in Suffolk County, New York. In 2017, FLEXIM opened its new company headquarters in Berlin and in 2018 began research cooperation with PTB, Germany’s National Metrology Institute of Germany, to further improve measurement accuracy.
FLEXIM, based in Berlin, Germany, with US offices in Edgewood, New York, exclusively manufactures clamp-on ultrasonic flowmeters. In October 2016, Emerson announced an agreement to jointly collaborate in the design and installation of flowmeter products for capital projects, and the companies have been partnering ever since. The deal was culminated at the end of September 2023. Emerson acquired Flexim to give itself more flexibility in the ultrasonic flowmeter market, and as a complement to its Rosemount inline ultrasonic meters. As of today, Flexim is retaining its name as a brand of Emerson.
Siemens
Siemens provides an interesting contrast to the companies discussed above in the way it handles branding. In 2003, Siemens bought the Flow Division of Danfoss. It followed this up with the acquisition of Controlotron, a manufacturer of clamp on ultrasonic flowmeters, in 2005. According to the CEO of Siemens Energy & Automation at the time, “The purchase of Controlotron will strengthen Siemens' portfolio and broaden its presence in the process instrumentation market.” Siemens brands all its flowmeters under the SITRANS label, followed by the letter F and then another one or two letters that designate the technology of the meter. This makes for a consistent offering, but it does so without the original brand names.
Company spinoffs
Companies sometimes spin off several related divisions into a new company to enable them to focus more on their core competencies. Danaher’s spinoff of its Environmental & Applied Solutions segment in September 2023 into a company named Veralto Corporation is a good example of this. Veralto consists of 13 companies centered around the water and product quality business. The company most closely tied to flow measurement is McCrometer, known for its magnetic, V-Cone, and propeller flowmeters.
The bottom line
Not all acquisitions are made for the purpose of augmenting product lines or adding to a company’s research capabilities. For example, Arcline is a private investment firm that owns DwyerOmega. Backed by Arcline, DwyerOmega announced on November 21, 2024, that it had acquired Process Sensing Technologies (PST). In November 2023, PST acquired Fluid Components, Inc. (FCI), a leading supplier of thermal flowmeters. As a result, DwyerOmega now owns FCI.
Large companies like Arcline are private investment firms that make acquisitions mainly to improve their bottom line. There are two philosophies about acquisitions among these companies: “Buy and Hold” and “Buy and Sell Over Time.” Firms that “buy and hold” often buy several companies in adjoining product areas and plan to keep them indefinitely or until there is reason to sell. Firms that “buy and sell” typically keep a company for 5-7 years and then sell at a profit. In the meantime, they are likely to make investments to build up the value of the company.
How to handle brand names
It’s clear from the above examples that different companies make different decisions about brand names when they acquire another company. In the case of Exxon and Mobil, both companies had strong brands with millions of loyal customers. Sacrificing one brand over another risks alienating the customers of the brand that loses out. Similar logic applies to Honeywell and Elster. While Honeywell is known the world over, Elster has an especially strong following in Europe, and is known for its ultrasonic, turbine, and positive displacement flowmeters. In the case of Emerson, the company has allowed its acquired companies to keep their brand names for the most part but is now moving towards more consolidation under the Emerson brand. This follows many years in which its instrumentation business was marketed as Emerson Process and then Emerson Automations Solutions.
Companies are increasingly recognizing the value of brands. Baker Hughes has brought back “Panametrics” as the name for its flowmeters and process analyzers. Emerson purchased the company Rosemount in 1976, which at the time was manufacturing precision flow, pressure, temperature, and level instruments. Emerson merged Rosemount with Fisher Controls in 1992. In 2014, Emerson announced a new global headquarters for its Rosemount products in Shakopee, Minnesota. It’s no wonder, then, that Emerson is still branding some of its flow, pressure, level, and temperature products under the Rosemount umbrella.
Like famous baseball and football teams, customers become loyal to companies and to their brands. They also treasure special treatment and recognition from these large companies. This is why so many successful companies like Marriott and Southwest Airlines have such elaborate and well-developed loyalty and reward programs. Levi’s has its Red Tab Member Program, and Amazon has Amazon Prime. The bottom line is if you want to be a successful company, emulate what other successful companies do.
For more information on flowmeters and the companies that partner and acquire in the flowmeter space, go to https://www.flowresearch.com or http://www.flowvolumex.com.
Jesse Yoder
Jesse Yoder, Ph.D., is president of Flow Research Inc. He has 30 years of experience as an analyst and writer in instrumentation. Yoder holds two U.S. patents on a dual-tube meter design and is the author of "The Tao of Measurement," published by ISA. He may be reached at [email protected]. Find more information on the latest study from Flow Research, "The World Market for Gas Flow Measurement, 4th Edition," at www.gasflows.com.
