Expected to Be Accretive to Earnings in 2019
Global safety equipment manufacturer MSA Safety Incorporated announced that it has entered into a definitive agreement to acquire California-based Sierra Monitor Corporation (OTCQB: SRMC) in an all-cash transaction valued at approximately $33 million. The acquisition accelerates MSA’s strategy to enhance worker safety through the use of cloud technology and wireless connectivity, while supplementing the company’s organic investments in software-as-a-service applications, including its recently established Safety io™ subsidiary.
Based in Milpitas, Calif., in the heart of Silicon Valley, Sierra Monitor is a leading provider of fixed gas and flame detection (FGFD) instruments and Industrial Internet of Things (IIoT) solutions that connect and help protect high-value infrastructure assets. Typical uses for Sierra Monitor technology include wastewater treatment facilities, light manufacturing, transportation infrastructures, and HVAC applications. Sierra Monitor has annual revenue of approximately $20 million and approximately 80 employees.
“We’re excited to have the opportunity to add Sierra Monitor to our core product portfolio and we look forward to welcoming the Sierra Monitor team to MSA,” said Nish Vartanian, MSA President and CEO. “Today’s agreement effectively fast tracks the timetable for our Safety io subsidiary to expand into infrastructure applications for our FGFD systems,” he said.
Launched in late 2018, Safety io is focused on leveraging wireless technology and cloud computing to enable a broad range of connected safety services and applications, including those involving the use of MSA portable gas monitors. “With Sierra Monitor’s extensive IIoT gateway offerings and its recent investments in cloud technology, we can accelerate our own connectivity strategy while also expanding our FGFD product line in a way that enables us to better serve markets where we do not currently have a market leading position,” Mr. Vartanian said. “Overall, this acquisition positions us to best leverage the broad potential of Safety io.”
In addition to connecting its own line of FGFD devices, Sierra Monitor’s IIoT solutions – marketed under the FieldServer brand – have extensive protocols to facilitate the connection of a broad array of infrastructure assets, such as boiler controls, chillers, lighting controls and any equipment that is integrated into a typical building management system. With a strong track record of innovation, Sierra Monitor has combined industrial sensing and automation with emerging technologies to provide IIoT solutions that connect and protect high-value infrastructure assets.
Sierra Monitor’s revenue base is evenly split between FGFD instruments and connectivity gateways that enable original equipment manufacturers and systems integrators to locally or remotely monitor and control fixed infrastructure assets. Sierra Monitor’s FGFD devices – branded as Sentry IT fire and gas detection solutions – protect personnel and facility infrastructures across a range of applications including wastewater treatment, alternative energy vehicle fueling and maintenance, and the oil and gas industry.
MSA Senior Vice President and Chief Financial Officer Ken Krause, who leads the company’s corporate development activities, commented, “As we look at our corporate strategy and where the safety market is headed over the long term, we see connectivity as an important differentiator.” Mr. Krause noted that MSA’s global installed base of FGFD systems consists of hundreds of thousands of instruments across the world. “The Sierra Monitor acquisition not only provides the opportunity to start to bring those instruments into the Industrial IoT, it enhances and supplements the organic investments we’ve been making in connectivity applications and software-as-a-service offerings,” he said.
“MSA’s leadership position in the safety market and commitment to innovation make it a natural home for Sierra Monitor,” said Jeff Brown, CEO of Sierra Monitor. “By leveraging MSA’s leading edge FGFD product offerings, and software engineering resources and expertise, we have the opportunity to scale our business and expand our reach far beyond the installed base and markets we have access to today.”