HMS Networks, a global leader in industrial information and communication technology, has announced a strategic move to acquire Red Lion Controls, a well-established provider of industrial automation solutions based in the United States. The acquisition, valued at USD 345 million (approximately SEK 3,600 million), significantly expands HMS’ footprint in the North American market, strengthening its position and complementing its existing offerings.
Red Lion Controls, with its innovative product portfolio and premium brands, is a prominent player in the industrial automation sector. The acquisition aligns with HMS’ commitment to advancing industrial information and communication technology, offering a robust combination of simulation tools and testing solutions. The agreement, signed with Spectris Group Holdings Limited, involves the acquisition of 100 percent of the shares in Red Lion Controls Inc. and Red Lion Europe GmbH, along with certain assets in other jurisdictions. The deal is expected to enhance cross-selling opportunities for both HMS and Red Lion products through their respective market channels.
During the twelve-month period ending on September 30, 2023, the combined annual sales of HMS and Red Lion exceeded SEK 4.4 billion, with an impressive adjusted EBIT margin of approximately 24 percent. The acquisition is anticipated to strengthen HMS’ presence in North America and contribute to the optimization of test strategies for Aerospace & Defense customers.
Staffan Dahlström, CEO of HMS Networks, expressed enthusiasm about welcoming Red Lion into the HMS family, emphasizing the compatibility of both companies in terms of products, geographic presence, and cultural aspects, “We are very happy to welcome Red Lion into the HMS Networks family, the companies are a great match both when it comes to products, geographic presence, and cultural aspects. The combination of Red Lion’s product portfolio, which is complementary to HMS’ offering and has limited overlap, and the geographic
match with Red Lion having a strong position in the attractive North American market, and HMS with its core markets in Europe, will generate good cross-selling opportunities.
Red Lion’s “Access” products fit well with HMS’ Anybus and Ewon product lines, while Red Lion’s “Connect” offering adds what HMS has been searching for several years; a strong Ethernet Switch offer with a strong market position. Finally, Red Lion’s “Visualize” offering brings new opportunities for HMS to explore the Data Visualization offering that is becoming more and more interesting with its central role in the Industrial Automation environment and its ability to provide additional value on top of HMS’ connectivity and network offering. We are eager to start working together and to realize the synergies between the companies and to enable
each other to take the next steps on our common future journey once the transaction closes.”
Red Lion boasts a rich history of over 50 years, serving industrial organizations globally. The company focuses on empowering industrial entities to harness the value of data through innovative and scalable products and solutions. Red Lion’s customer base spans various sectors, including factory automation, alternative energy, oil and gas, power and utilities, transportation, and water and wastewater.
The Red Lion offering revolves around three core product lines: Access, Connect, and Visualize. These products cater to industrial end customers seeking enhanced cloud connectivity, secure communication, and data visualization solutions. The acquisition is expected to be finalized in the first half of 2024, subject to customary regulatory approvals and closing conditions. Upon completion, the collaboration between HMS and Red Lion is poised to pave the way for transformative advancements in the industrial automation landscape.
