Emerson to Buy National Instruments in $8.2B Deal - Modern Distribution Management

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Emerson to Buy National Instruments in $8.2B Deal

The deal is expected to close in the first half of Emerson’s fiscal 2024.
Emerson NI

St. Louis, Missouri-based Emerson Electric and National Instruments have finally agreed to a deal that will allow Emerson to purchase NI for roughly $60 per share in cash at an equity value of $8.2 billion, Emerson announced April 12.

In its announcement, Emerson said it already owns approximately 2.3 million shares of NI, representing approximately 2% of shares outstanding, which were acquired at a weighted average price of $36.84.

In January, Emerson announced that it has made a $7.6 billion bid for Austin, Texas-based National Instruments, in what some news outlets framed as a hostile takeover attempt. At the time, Emerson said that NI had avoided serious buyout negotiations since early 2022.

“We are pleased to reach an agreement with NI, whose best-in-class test and measurement product and software offerings accelerate Emerson’s progress toward a cohesive, higher growth and higher margin automation portfolio,” Emerson President and CEO Lal Karsanbhai said in the company’s April 12 announcement. “With this expansion into test and measurement, Emerson will enhance its automation capabilities and gain a broader set of customers that relies on NI’s solutions at critical points along the product development cycle. These capabilities provide Emerson industry diversification into attractive and growing discrete markets like semiconductor and electronics, transportation and electric vehicles, and aerospace and defense that are poised to benefit from secular growth trends. NI’s business is well-aligned with our vision for automation and we look forward to working together to bring more comprehensive and innovative solutions to our customers, accelerate growth and position Emerson to deliver significant shareholder value.”

Emerson said the deal will create several benefits:

  • Balanced and diversified end markets
  • Complementary software and innovation capabilities
  • Substantial synergies between the two companies
  • Strong financial profile and attractive returns for shareholders
  • United and aligned company cultures

The Boards of Directors of both Emerson and NI have approved the deal, Emerson said. In line with the agreement, NI shareholders will receive $60 per share in cash, which represents a 49% premium to NI’s closing share price as of January 12, the day prior to NI’s public announcement of a strategic review.

The deal is expected to close in the first half of Emerson’s fiscal 2024, subject to the completion of customary closing conditions, including regulatory approvals and approval by NI shareholders.

Emerson said it expects to finance the transaction with available cash and liquidity, including approximately $8 billion of post-tax proceeds from the majority sale of Climate Technologies to Blackstone announced in October 2022. That deal is expected to close in the second calendar quarter of 2023, Emerson said.

“Over the past several months, we’ve been evaluating strategic options for the future of our business with the intent to maximize its value,” NI CEO Eric Starkloff said. “We ran a robust and comprehensive process, considered a range of potential options, and believe this represents the best outcome for all NI stakeholders. This transaction is a strong testament to the improvements and initiatives we’ve implemented in recent years that have transformed NI into a software focused company with higher growth, better profitability and lower cyclicality. We’re thrilled that Emerson recognizes the value we’ve created and we believe they will help us build on our momentum to further position NI as a leading provider of software-connected automated test and measurement systems.”

Read more about the agreement here.

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