As if to confirm that the well-known $100M growth barrier still applies, yet another mid-sized company has been acquired. UK based MTL Instruments Group, one of very few independent automation companies announced last month (mid-December 07) that it would be acquired by Houston, USA based Cooper Industries. This rings down the curtain on 37 years of independence at MTL.

Cooper Industries had revenues of $5.2B in 2006 and market-cap of about $10B, 85% from electrical products. Cooper is paying £140M ($275M) for MTL, a premium of about 20-30% over recent MTL share prices. MTL had revenues of £85.3M ($ 170M) and net income of £5.5M ($10.8M) in 2006, so the Cooper offer represents a price/earnings multiple of 26 to 1, and price/revenue multiple of over 1.6. Pretty good!

MTL will become part of Cooper Crouse Hinds, which makes flameproof and explosion-proof equipment for hazardous areas. This is a good fit for MTL which means they can still sell to their broad customer base, with increased global economies and market penetration.

The MTL management team is happy with the good fit and MTL's board has unanimously recommended acceptance. Cooper has announced that since making the announcement of its intent to acquire the MTL shares it has increased the number of irrevocable undertakings to accept the offers it had received from MTL shareholders to almost 92%, including exercises of options by MTL employees.

The deal is now being scrutinized by regulators and is expected to be approved and completed by mid-February 08.

MTL joins Cooper Crouse-Hinds for £140M: http://www.processingtalk.com/news/ius/ius108.html

MTL Group website overview: http://www.mtl-inst.com/

2006 - MTL Corporate Culture Review: http://jimpinto.com/writings/MTL.html