Emerson set to acquire National Instruments for $8.2 billion

Emerson and National Instruments (NI) 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.

“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 defence 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,” said Lal Karsanbhai, president and CEO of Emerson.

Emerson currently owns approximately 2.3 million shares of NI, representing approximately two 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.

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 aim at helping customers solve current and future test challenges and improve speed and efficiency in their product development cycles.

“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 CEO. “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.”

• Emerson explains in a press statement that this transaction is expected to drive value creation and advance its position as a global automation leader by expanding and diversifying its customer base within highly attractive end markets. Overall, NI will increase Emerson’s end market exposure in discrete markets to 18 percent of sales, which will be Emerson’s second largest industry segment.
• NI’s technology stack of intelligent devices, controls and software complements Emerson’s own technology stack and will accelerate Emerson’s efforts to create a cohesive industrial technology portfolio.
• Emerson has identified $165 million of cost synergy opportunities by the end of year five through the application of best practices from the Emerson Management System.
• The transaction is expected to be immediately accretive to adjusted EPS and Emerson’s long-term financial targets outlined at Emerson’s 2022 investor conference.
• Emerson further adds that NI’s innovation and problem-solving-focused culture is highly complementary to its purpose-driven culture focused on innovation.