(ETN) Eaton Completes ATCOM Buy

Eaton Corporation (ETN) said it has successfully completed the acquisition of the previously announced ACTOM’s Low-Voltage Electrical Business in South Africa.

Eaton expects the addition of ACTOM’s low-voltage business to help establish a prominent presence for itself in the attractive South African market and serve as a platform for growth in the region. The combination of Eaton’s business with ACTOM’s low-voltage business will offer a broader set of power distribution and power quality solutions that will enable customers to more effectively grow and compete in their markets.

Based in Johannesburg, ACTOM Low-Voltage is a leading South African manufacturer and supplier of motor control components, engineered electrical distribution systems and uninterruptible power supply systems. The company’s business comprises two manufacturing facilities in South Africa, with total 12-month sales of $65 million and about 490 employees. Eaton had agreed upon buying ATCOM in January 2011.

Eaton has always engaged in strategic, overseas acquisitions that have enhanced its global reach and allowed for inorganic expansion. Earlier last week, the company said it will buy a German liquid filtration system producer E. Begerow GmbH and Co. KG to expand its liquid filtration business. The company said the acquisition of Begerow will enhance its position in the liquid filtration market.

In May this year, Eaton had sealed another deal to acquire German hydraulics company Internormen Technology Group, thereby expanding its reach in thefiltration products business and venturing into new emerging markets such as India, China and Brazil.

Cleveland, Ohio-based diversified power management company Eaton Corporation is a leading supplier of power accessories in the aerospace and automotive industries and has customers spanning 150 countries. Eaton has 70,000 employees and reported sales of $13.7 billion in 2010.

Over the years, Eaton has gradually transformed itself from an automotive and truck component manufacturer into a diversified industrial enterprise with leadership positions in its core electrical, hydraulic and aerospace market. In our view, the company’s organic growth will be driven by strength in its end-markets.

Eaton Corp. is scheduled to release its second quarter 2011 financial results on July 18, 2011. The Zacks Consensus earnings estimates for second quarter 2011, fiscal 2011 and fiscal 2012 are 95 cents, $3.93 and $4.65 per share, respectively.

Eaton Corporation currently retains a Zacks #2 Rank (short-term Buy rating). We maintain our long-term ‘Outperform’ rating on the stock. The company competes with ITT Corporation (ITT) and Parker Hannifin Corporation (PH).

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