Emerson Electric to acquire NI Corp for $8.2bn

July 2023 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

July 2023 Issue

Following a near year-long pursuit, US industrial conglomerate Emerson Electric is to acquire measurement equipment maker National Instruments (NI) Corp in a transaction valued at $8.2bn.

Under the terms of the definitive agreement, NI shareholders will receive $60 per share in cash, which represents a 49 percent premium to NI’s closing share price as of 12 January 2023, the day prior to NI’s public announcement of a strategic review.

Emerson already owns approximately 2.3 million shares of NI, representing approximately 2 percent 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.

Emerson expects to finance the transaction using available cash and liquidity, including approximately $8bn 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 quarter of 2023.

A global technology and software company providing innovative solutions for the world’s essential industries, Emerson, through its leading automation portfolio, which includes its majority stake in AspenTech, helps hybrid, process and discrete manufacturers optimise operations, protect personnel, reduce emissions and achieve their sustainability goals.

“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,” said Lal Karsanbhai, president and chief executive of Emerson. “These capabilities provide Emerson industry diversification into attractive and growing discrete markets like semiconductor and electronics, transportation and electric vehicles, and aerospace and defence that are poised to benefit from secular growth trends.”

The transaction has been approved by the boards of directors of both Emerson and NI.

“This transaction is a strong testament to the improvements and initiatives we have implemented in recent years that have transformed NI into a software focused company with higher growth, better profitability and lower cyclicality,” said Eric Starkloff, chief executive of NI. “We are thrilled that Emerson recognises the value we have 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 is expected to close in the first half of 2024, subject to the completion of customary closing conditions, including regulatory approvals and approval by NI shareholders.

Headquartered in Texas, NI provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost. Operating in more than 40 countries and serving approximately 35,000 customers, its solutions help customers solve current and future test challenges and improve speed and efficiency in their product development cycles.

Serving as financial advisers to Emerson are Goldman Sachs & Co. LLC and Centerview Partners LLC, with Davis Polk & Wardwell LLP serving as legal adviser. BofA Securities is serving as exclusive financial adviser to NI, with Wachtell, Lipton, Rosen & Katz serving as legal adviser.

Mr Karsanbhai concluded: “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.”

Fraser Tennant