Tuesday, March 15, 2011

A shark amongst minnows?

The machine vision industry, and especially the integration end of it, is pretty fragmented. A host of small companies battle over every project, and the result is that no one seems to make any money. (Of course, selling visionware is a different matter – there’s lots of money to be made from lenses, cameras and software.) Everyone agrees that some consolidation among integrators would improve financial returns but few seem willing or able to make the first move.

The exception is ISRA. This German integration house, specializing in surface inspection, has grown sales by an average of 30% per year over the last decade through a combination of acquisition and organic growth, and there’s no sign of them letting up.

Two weeks ago they published results for the first quarter of their 2010-2011 financial year – revenues are up 15% to €16.1m (about $20m) – and the press release says they project €70m for the full year. There are also hints that more acquisitions are coming, and I’m sure they’ll comfortably beat their sales goal.

One reason for my upbeat view is that Eric Ceyrolle, formely EVP of Sales & Marketing at Cognex, has been persuaded to join ISRA’s Executive Board. Eric is a highly experienced machine vision guy and he knows the European market better than he knows the back of his hand. I also have to think that Eric would not have jumped ship unless he thought prospects at ISRA were superior to those at his old employer.

There is of course an alternative, and more conspiratorial, view: perhaps ISRA decided the only way to deal with the formidable competitor that is Cognex was to poach one of their key execs. But I would never try to float that idea.

Either way, I think we can be sure the company will keep growing, and in the process a few surface inspection integrators that choose to sell out will make a tidy sum. In fact perhaps planning to be bought out by ISRA is the only viable business model in integration!

1 comment:

Anonymous said...

Ceyrolle did leave cognex summer (or just before summer) 2009 already. i guess his 2 year non-compete agreement has lapsed now. so they did not hire him from cognex.......