Tektronix buys out Sypris... Good bad?? comments.

[USMCPMEL]

Tektronix buys test business from Sypris
By Mike Rogoway, The Oregonian
October 26, 2009, 10:37AM
Tektronix said this morning that it has acquired the test-and-measurement business of Sypris Solutions Inc. for $39 million in cash.

Tektronix, based in Washington County, said the deal improves Tek's ability to serve customers with rapid-turn services in the U.S. The company declined to say how many people work in Sypris' division, or elaborate on its plans for the acquired unit.

Since its 2007 acquisition by Danaher Corp., Tek has made a series of cutbacks to steamline the company and respond to declining sales triggered by the recession. Tektronix employed 2,000 in Oregon before its sale, but will not say how many Oregon employees remain.

Tektronix makes oscilloscopes and other equipment to monitor the performance of electronic devices.

Kentucky-based Sypris said its test-and-measurement business provides calibration services and specialty products for several markets, including military applications, aerospace, avionics and telecommunications. Sypris said it will use the cash to pay down debt and invest in its remaining aerospace and defense businesses.

Shares of Sypris shot up 56 cents, more than 25 percent, after the companies announced the deal this morning.

Last week, Danaher said sales in Tek's division fell 23 percent during the third quarter. But Danaher said market conditions have improved in the U.S. and China, and that orders are picking up.

[griff61]

Kind of hard to tell, not sure I'd want to be a Sypris employee right now. Although it kind of puts them under the same umbrella as Fluke et al, Tek's numbers look pretty grim. Seems like a bargain price too...

[CalibratorJ]

Whew, I am SO glad I didn't take that job now - ntm the auto industry cutting back etc etc etc

[Hawaii596]

On the one hand, it is another piece of the test equipment world crumbling away from what we used to know.  Used to be the big three:  HP, FLUKE and TEK.  We all know what happened to them.

And Tek isn't what it used to be.  I remember a few years ago when a bunch of Tek's engineers jumped ship and went to LeCroy, changing them from a "little cheaper dealer" into a contender.  Some of the more recent model high BW LeCroy scopes, when high end engineer users where I worked at the time, did an evaluation between Tektronix and LeCroy 6 GHz scopes, and the LeCroy blew Tek out of the water.

As for Sypris and Tek... I won't editorialize in public about them.  I'll just say they aren't the worst or the best.  Tek isn't what they used to be.  So I think its about a push - one medium company joins another medium company that is owned by a conglomerate that is trying to take over most of the US instrument industry.

Who all does Danaher own now:  Fluke, Tek, DHI, just about every med tester company (Lionheart, DNI Nevada, Dale, etc... all bought up by Fluke).  And of course Wavetek (now Fluke), Datron -gone to Wavetek/Fluke/Danaher. There are plenty more, I just can't think of them.

So Tek and Sypris... just one more piece in this vast metrological cultural revolution we are witnessing.

[griff61]

you can sit just about anybody in front of it and crank out the numbers.

for $10 an hour...

[USMCPMEL]

Does anybody have anything concrete to say or is it all just vague references and adjacent tangents?

[Bryan]

Perhaps Tek sees it as a way to re-establish the presence they once had with multiple service centers and provide calibratrion services outside of thier brand.
Don't know if it's good or bad but probably cheaper to buy existing busines than build it all over again.  Wouldn't have done it if they didn't think there was $$ to be made.

[griff61]

Does anybody have anything concrete to say or is it all just vague references and adjacent tangents?

Sypris has been trying to unload it's Test and Measurement division since before I started there in 2001. The problem has been that they required interested parties to take the Test labs along with the calibration operations. The fact that they seem to have done a deal with Tek without requiring them to take it all is mot really a very good indicator and considering the amount of locations and the amount of capital equipment owned by each lab, $39 million seems a bit lowball.
Tek has the backing of Danaher, which includes Fluke, etc etc, so the idea that Tektronix 'needed' to get a foot into the market is a bit suspect (IMO). I'm leaning more towards the idea that Danaher is in Competition with Davis or Agilent (pick your favorite) in controlling market share from top to bottom.
Depending on where you are in the food chain, it could be good or bad. As far as calibration goes, I can't imagine being a service tech in a and there not being a some sort conflict of interest whenever one of my parent company's many brands come in (or a competitor's).
There's already too much emphasis on 'bean counting'. This will simply add more pressure.
It will be interesting to see how that plays out.

Better?

[Bryan]

I know Fluke closed up it's DFW service center a couple months back so perhaps it is a Danaher thing re-establishing centers that Tek & Fluke abandoned.  Thatt is to say one Sypris location vs separate Fluke & Tek.
This is all specualtion & babble on my part so use the approprate BS filtering.

[griff61]

I know Fluke closed up it's DFW service center a couple months back so perhaps it is a Danaher thing re-establishing centers that Tek & Fluke abandoned.  Thatt is to say one Sypris location vs separate Fluke & Tek.
This is all specualtion & babble on my part so use the approprate BS filtering.

Danaher seems to like the brand name route on aquisitions, perhaps they will re-brand Sypris to Tektronix or revert back to the Bell Technologies name...

Fluketronix anyone?

[scottbp]

Perhaps Tek sees it as a way to re-establish the presence they once had with multiple service centers and provide calibratrion services outside of thier brand.
Don't know if it's good or bad but probably cheaper to buy existing busines than build it all over again.  Wouldn't have done it if they didn't think there was $$ to be made.

I know Fluke closed up it's DFW service center a couple months back so perhaps it is a Danaher thing re-establishing centers that Tek & Fluke abandoned.  Thatt is to say one Sypris location vs separate Fluke & Tek.
This is all specualtion & babble on my part so use the approprate BS filtering.

This all seems vaguely familiar... Agilent did the same thing with Davis. http://www.agilent.com/about/newsroom/presrel/2009/23jun-em09118.html I wonder if Sypris will be taking over as service center for both Tektronix and Fluke?

[USMCPMEL]

That is how it started out with Sypris also. Now we were actually bought out and are a part of Tektronix.

[Colt45]

   

  Its not good or bad, it is just the weather.  If you want to be a major player in the commercial calibration business now you better bring a large platter of business solutions.  The ability to be a single source provider is going to be the bench mark for all large contract test and calibration services bidders. 

I am sure Simco, Transcat, HTSI, and the other major players in the commercial calibration industry will be scrambling to find strategic partnerships.  The trend for the last 20 years is for large scale manufacturing  to out source all of it's auxiliary services with the intent to reduce costs and rely on a vendor who has a core competency in the field.

The fewer vendors a company needs directly translates to a smaller burden on their purchasing department to maintain purchase orders, monitor quality , and track shipments. The ability to outsource several functions to a single vendor can result in millions of dollars in cost reduction.

Many large scale manufactures now have business entities spread across the country and the world.  An easy sale to such companies is a world wide reach with standardized service solutions. Danaher seems to be moving in this direction with the acquisition of Sypris.  This vision may translate to the Mcdonalds style of food service on a global scale in a high tech industry.

That being said, if Sypris employees want to see their future they would be well advised to look at what was done to Fluke and Tektronix.  They should also look to the experience Fluke and Tektronix customers have had since they were acquired by Danaher.  It is not all bad, it is not all good, it is just the weather, plan accordingly.