Acquisitions broaden the global scope of Measurement Specialties
Call it a sixth sense. When CEO Frank Guidone began to restructure Measurement Specialties, Inc. in the early part of the decade, he studied the global sensor market. What he discovered, recalls Chief Financial Officer Mark Thomson, changed the company’s mission.
Guidone found a market that was “extremely fragmented but extraordinarily large. It was growing at a pace two to three times the gross domestic product (GDP). It was a unique opportunity,” Thomson says.
So Guidone shifted the focus of his publicly traded company, opening the door to international growth. The designer and manufacturer of sensors and sensor-based systems sold its consumer product business — a unit that made items such as bathroom scales and tire-pressure gauges — and concentrated on internal development by expanding through strategic overseas acquisitions.
After closing its New Jersey headquarters, where Measurement Specialties had operated since its founding in 1981, the company consolidated manufacturing to two locations: Hampton and Shenzhen, China.
Today, many people have an almost daily connection to Measurement Specialties. If you’ve had an ultrasound, flown on an airplane or used an oven thermometer, the Hampton-based company played a role. “Almost everything you see and touch has a sensor,” notes Thomson.
Sensors can measure pressure/force, position, vibration, temperature, and humidity and fluid properties. They are found in products ranging from helicopters and automobiles to hospital beds and appliances. The company’s products can be used as embedded devices by original equipment manufacturers (OEMs) or as stand-alone sensors for test and measurement.
The company’s first acquisition in 2004 was the French-based manufacturer Humirel, which specialized in humidity sensing technology.
“In the early 2000s one of our acquisition strategy tenets was to get a presence in Europe,” Thomson says.
Since that acquisition, the company has bought 21 businesses. “The vast majority of businesses we have acquired have technology, development and manufacturing capabilities. They are generally niche businesses involved in various sensor [technologies].”
The 120,000-square-foot facility in Hampton, which employs 220 workers, manufactures position and pressure sensors as well as Piezo film, used in a variety of applications including vibration and ultrasound sensors. The location is a plus because of access to the Port of Virginia, major airports and technical talent.
Hampton is one of 10 company sites in the U.S. Globally the company has 3,640 employees — 783 in the U.S., 688 in seven European sites (in Ireland, France, Switzerland and Germany) and 2,169 in two locations in China. “We’ve invested in low-cost regions such as China. This is our 20th year in Shenzhen,” Thomson says.
Worldwide, Measurement Specialties has more than 3,000 customers. In North America, sales are slightly higher than in Asia and Europe, although Thomson says the three markets are almost equal.
The company has seen double-digit growth in the last nine years. From fiscal 2005 to fiscal 2013 it had an 18 percent compounded annual growth rate. “We have been able to capitalize on technology through key development efforts and augment business growth through strategic acquisitions,” Thomson says. Sales rose from $92 million in fiscal 2005 to $347 million in fiscal 2013.
Last month the company, which trades under the ticker symbol of MEAS on the Nasdaq exchange, hit $1 billion in stock market value when its share price rose to nearly $64.00.
The company has been involved in the global market since 1994 when it opened a factory in Shenzhen.
Doing business in Europe is similar to doing business in the U.S. Thomson says France often gets a “bad reputation” because the country’s labor laws are generally not company friendly. Yet Measurement Specialties has fared well there.
“We are located adjacent to a good university, and we are able to recruit extraordinary technical talent,” says Thomson. Plus, the French government provides “incredible incentives. Their research and development tax incentive covers about 50 percent of our investment in R&D projects.”
The tax incentives coupled with access to young, inexpensive, qualified technical talent allows the company to leverage the site for some of its “key product development efforts such as our urea quality sensor [used in emission control systems),” Thomson says.
Economy in Hampton
Thanks to its location near the Port of Virginia and major airports, Hampton has cultivated a diverse economic base. Key industry targets include aerospace/aviation, advanced manufacturing, modeling and simulation and maritime/logistics. Last year Hampton added eight new companies, including Carson Helicopters in Fort Monroe, a manufacturer of helicopter composite tail rotor blades, and Consentino, an importer of fine Spanish quartz and natural stone surfaces. Large employers include NASA Langley Research Center, manufacturer Alcoa-Howmet in Hampton, Measurement Specialties and Specialty Foods Group, which produces processed meats and meat products. The city is developing a 21st Century Science Park through a public/private partnership. The park, close to the National Institute of Aerospace, is expected to be a hub for research and technology jobs.
Economy in Toulouse, France
One of the largest cities in France, Toulouse is known as a hub for the aerospace industry as well as a university center with a large number of engineering schools. Other industries in the city include biotechnology, nanotechnology, information technology and aerospace. The city is home to the headquarters of aircraft manufacturer Airbus. It has about 11,500 employees in the area around Toulouse as well as in the technical complex Toulouse Space Center. Other companies in the city include silicon innovative Intel and satellite system manufacturer Astrium Satellites.