Emerson reveals $7.6B buyout bid for Texas-based public company
Emerson Electric Electric Co. (NYSE: EMR), the Ferguson-based automation and software business, on Tuesday made public its offer to buy Texas-based National Instruments Corp. (NI) in a deal giving NI an enterprise value of $7.6 billion.
Emerson said it had submitted the proposal Nov. 3 to the board of NI (Nasdaq: NATI) to acquire the Austin-based maker of automated testing equipment for $53 a share in cash. That gives the deal an equity value of $6.92 billion, excluding debt, according to Reuters. That’s up from a bid Emerson said it submitted May 25 offering to buy NI for $48 a share.
The most recent offer is a 32% premium to NI’s closing price Jan. 12, the day prior to NI’s announcement Jan. 13 that it was exploring strategic options following acquisition interest from other companies. NI also adopted a so-called “poison pill” in the form of a shareholder rights plan “to protect the interests of the company and its shareholders,” according to the announcement.
Emerson said Tuesday it was going public with its offer after “numerous attempts to engage constructively with NI in private since May 16, 2022.” The company also said it has purchased 2.3 million shares of NI in the open market and has received approval under the Hart-Scott-Rodino Act to increase its stake in NI.
“Although Emerson would have preferred to reach an agreement privately, given NI’s announcement that it is undertaking a strategic review, and after refusing to work with us toward a premium cash transaction over the past eight months, we are making our interest public for the benefit of all NI shareholders,” Lal Karsanbhai, Emerson’s president and CEO, said Tuesday in a press release.
“Acquiring NI is another step forward in Emerson’s journey to develop a cohesive, higher growth and higher margin portfolio and build on its global automation focus,” he said. “As Emerson outlined at our recent Investor Conference, we are transforming our portfolio toward higher-growth automation markets aligned with secular macro trends, which will deliver significant growth and profitability for years to come.”
Emerson has been focusing on becoming what executives have called “a pure-play global automation company.”
The company announced Oct. 31 the sale of its Climate Technologies business to private equity giant Blackstone in a deal that values the business at $14 billion, gives Emerson a minority stake and includes the sale of the company’s Ferguson headquarters. Emerson has said it will search for a new headquarters both within and outside St. Louis.
“We have long admired NI and believe that combining its best-in-class electronic test and measurement product and software offerings with Emerson’s industry-leading automation technology and software would enhance our ability to bring comprehensive solutions to a diverse set of end markets, accelerating growth and positioning Emerson to create significant shareholder value,” Karsanbhai said in Emerson’s release Tuesday. “We stand ready to work immediately with NI’s Board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all NI shareholders.”
For its fiscal 2022 ended Sept. 30, Emerson reported net earnings available to common stockholders of $3.2 billion, up 40% from fiscal 2021. It reported fiscal 2022 net sales of $19.6 billion, an increase of 8% from the prior year.
