Emerson and NI announced that they have entered into a definitive agreement under which Emerson will acquire NI for $60 per share in cash at an equity value of $8.2 billion. Emerson 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. As a result, Emerson’s effective per share purchase price is $59.61.
NI provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost. NI’s solutions help customers solve current and future test challenges and improve speed and efficiency in their product development cycles. NI had $1.66 billion in 2022 revenue and operates in more than 40 countries, serving approximately 35,000 customers across semiconductor and electronics, transportation, and aerospace and defense markets.
“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,” said Lal Karsanbhai, President and Chief Executive Officer of Emerson.
“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.”
“Over the past several months, we’ve been evaluating strategic options for the future of our business with the intent to maximize its value,” said Eric Starkloff, NI’s Chief Executive Officer.
“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.”
The transaction has been approved by the Boards of Directors of both Emerson and NI. Under the terms of 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, 2023, the day prior to NI’s public announcement of a strategic review.
The transaction 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 expects to finance the transaction using 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, which is expected to close in the second calendar quarter of 2023.
On February 8, 2023, Emerson provided continuing operations second quarter underlying sales growth guidance of 8%-10% and adjusted earnings per share guidance of $0.95-$1.00. Emerson is reaffirming this guidance.