Smiths Group, a global, diversified family of companies, can infuse you, seal you, detect you, connect you, and hose you. With operations in more than 50 countries, it has five main divisions: John Crane (provides seal, bearing, filtration, and rotating products), Smiths Medical (drug delivery and infusion devices), Smiths Detection (security sensors), Smiths Interconnect (electronic connector, microwave, and protection products), and Flex-Tek (HVAC and fluid management components). Key customers include hospitals, oil and gas and power generation companies (Chevron), government agencies (US Department of Defense), telecom companies (Motorola), and aerospace/defense manufacturers (Raytheon).
John Crane, the group's largest division representing more than 30% of total sales, is a leading provider of mechanical seals, engineering bearings, couplings, and rotating technologies that serve OEMS and aftermarket customers in the oil and gas, power generation, chemical, pharmaceutical, pulp and paper, and mining markets.
Smiths Medical is the group's second largest division and manufactures drug delivery devices that are used to treat cancer patients and those with pain disorders. Its vital care products are used to treat hospital-acquired infections, manage patients airways during surgery, maintain body temperature, and assist in in-vitro fertilization (IVF) therapy. Its safety products help prevent needlestick injuries and reduce cross-infections. This portfolio of products is sold under the brand names BCI, Graseby, Portex, Pneupac, Medex, Deltec, and Medfusion, among others. Manufacturing facilities are located in the US, Mexico, the UK, Italy, Germany, and China.
Smiths Detection designs and manufactures sensors that detect explosives, weapons, chemical agents, biohazards, narcotics, and contraband. Its detection products include X-ray, trace detection, millimetre-wave, infrared, and biological diagnostics. It has manufacturing centers in North America, the UK, Germany, France, and Russia. The division sells both directly and through third-party distributors to the likes of the TSA and the UK Ministry of Defence, in addition to the US Department of Defense.
The company's smaller Interconnect division manufactures electronic components and subsystems that provide connectivity, power, and protection. Products include connectors, microwave components, and protection products to OEMs, system suppliers, and subsystem manufacturers primarily in the telecommunications and aerospace/defense markets.
Flex-Tek, the group's smallest division, makes engineered components for fluid and heat management. Products include flexible hosing and rigid tubing, which are used for fuel and hydraulic applications in commercial and military aircraft, delivering fuel gas and air conditioning in residential and commercial buildings, and providing medical respiratory care. Its heat and thermal systems are designed to improve the performance of HVAC equipment, domestic appliances, and medical diagnostic equipment.
Smiths Group has seen steady sales growth and operating profit over the last several years, thanks in part to the fact that it is well diversified among product portfolios, customers, and location of assets. North America accounts for the majority of its sales, but it is seeing positive growth in such emerging markets as China, India, and Russia. Following a rough couple of years for the global economy and in which Smiths Group undertook a restructuring to cut costs, all divisions managed to deliver margin improvement in fiscal 2011, and together they enabled the company to generate its best profit margins since the recession.
This success is attributed to a number of factors: for one, Smiths Group believes that investing in new product development across all lines is a key driver of future sales and continued margin growth. It is also trying to drive more growth through bolt-on acquisitions that add to its technologies and extend its geographic reach. In line with this strategy, Smiths Interconnect acquired Interconnect Devices, Inc. (IDI), a manufacturer of application-specific spring probe connectors, in 2010. The acquisition gave Smiths Interconnect a major plant in Suzhou, China and increased sales capabilities there and possibly in parts of Europe, where IDI has limited presence.
In late 2011 the division acquired Power Holdings from Bertram Capital in an all-cash deal for $235 million. The holding company is comprised of Virginia-based Power Distribution Inc., manufacturer of power distribution, monitoring, and switching equipment, Michigan-based Marelco Power Systems, Inc., maker of controls, integrated power supplies and magnetic products, and California-based ONYX Power, Inc., producer of inverters, transformers and other ciritical power equipment for corporate data centers. The deal continued the company's goals of product and distribution growth.