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Heat-Seeking Division

TA Instruments Leverages Small Buyouts For Growth

by Marc S. Reisch
September 5, 2011 | A version of this story appeared in Volume 89, Issue 36

Waters At A Glance

Headquarters: Milford, Mass.

Sales: $1.6 billion

Net income: $382 million

R&D spending: $84 million

Capital spending: $63 million

Employees: 5,380

BUSINESSES (% of total sales):

Waters division (90%): Ultra-performance and high-performance liquid chromatography instruments, chromatography columns, mass spectrometry systems, consumables, and operating software

TA Instruments (10%): Rheometry and microcalorimetry instruments and associated operating software

NOTE: Figures are for 2010.

Waters Corp.’s TA Instruments division, a maker of calorimeters and rheometric measurement instruments, has the same bolt-on acquisition strategy as its parent. Late in July, TA purchased Anter Corp., a privately held maker of thermal measurement systems based in Pittsburgh with about 30 employees.

“We seek out companies we understand,” explains Terrence P. Kelly, president of TA. They are typically entrepreneurial small firms with good technology but without the wherewithal to reach global customers.

“We use our sales and marketing organization to grow them,” he says. Other small firms TA has purchased since 2007 include Thermometric AB, a Swedish maker of microcalorimetry instruments, and VTI Corp., a maker of sorption and thermogravimetric tools.

Kelly knows the benefit of that sales and marketing organization: It’s the same one Waters was using when Waters purchased the small instrument firm in 1996. Today, about 60% of TA’s sales are to overseas customers, Kelly says. Sales were mostly to domestic customers before TA became a part of Waters.

Arthur G. Caputo, executive vice president of Waters, explains that Waters initially believed “there could be some synergies between some of the products we had for the industrial sector and TA’s product lines. As time went on, we found that wasn’t the case.” Since Waters bought it, TA has operated as a stand-alone division based in New Castle, Del.

Like the small operations it buys today, TA was a small independent firm between 1990 and 1996. The business originally took shape inside DuPont’s research station in Wilmington, Del., where scientists developed the first instruments to characterize the polymers and fibers that were then a significant part of DuPont’s business. The business was spun off from DuPont in 1990 in a management-led buyout when DuPont decided that instruments were tangential to its chemical and polymer operations.

TA is a natural alternative investment for Waters, Kelly says. And it shares “a similar philosophy based on technical development and service to customers.”



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