Moving to Advance Its Automation Portfolio, Emerson Proposes to Acquire National Instruments

By Chantal Polsonetti

Category:
Acquisition or Partnership

Moving to advance its automation portfolio, Emerson announced that it submitted a proposal to the Board of Directors of National Instruments (NI) to acquire NI for $53 per share in cash at an implied enterprise value of $7.6 billion.  This announcement follows NI’s recent public announcement of its own regarding initiation of a review and evaluation of the company’s strategic options.  The Emerson proposal, which is not subject to any financing conditions, was submitted to NI on November 3, 2022, and represents an improvement over an initial $48 per share proposal submitted on May 25, 2022. Emerson has made numerous attempts to engage constructively with NI in private since May 16, 2022. Full details, including Emerson’s previous correspondence with NI, are available at www.MaximizingValueAtNI.com .

Combination Would Advance Emerson’s Global Automation Portfolio

Emerson is actively transforming its portfolio to create a higher value, cohesive industrial technology portfolio serving a diversified set of end markets. With NI, Emerson would gain a strong, complementary portfolio of Automation Portfoliodifferentiated electronic test and measurement offerings, and a technology stack of intelligent devices, controls, and software that complements Emerson’s technology stack in its core automation markets.

Test and measurement is one of Emerson’s four priority segments.  With favorable long-term trends, test and measurement is viewed by the company as a fast-growing and complementary adjacency to Emerson’s portfolio. This acquisition would enable Emerson to further expand and diversify its customer base within highly attractive end markets with strong secular trends including semiconductor, automotive and electric vehicles, and aerospace and defense.

The transaction is expected to be accretive to Emerson’s adjusted EPS in the first year, meets Emerson’s communicated returns threshold, and will improve Emerson’s overall growth. NI has an attractive financial profile with approximately 70% gross margins. NI’s business has strong positions in attractive and growing markets, creating sustainable top line growth potential. Emerson sees significant potential for profit and cash flow improvement across the NI business by applying proven operational excellence and productivity levers through Emerson’s Management System.

 

Emerson issued the following statement on January 23, 2023 regarding its all-cash proposal to acquire National Instruments:

“Emerson's objective with publicly disclosing our proposal to acquire NI was to ensure that the NI Board of Directors executed a fair and transparent strategic review process, and that NI's shareholders understood the credibility of our proposal. Over the course of the last week, following the public statements by Emerson and NI, we have been pleased to see engagement between the management teams and advisors for NI and Emerson. We are optimistic that the NI Board has commenced a process that we believe will lead to the sale of the company. NI has also confirmed Emerson will be a participant in that process.

"With the steps that NI and its Board have taken since our public proposal, Emerson has decided to proceed in its pursuit of acquiring NI without nominating its selected Independent Directors for election to NI's Board at its upcoming Annual Meeting of Stockholders.

"Emerson is committed to an acquisition of NI and is participating in the strategic review process. We believe our premium all-cash proposal at $53 a share, with no financing conditions or anticipated regulatory concerns, is compelling and in the best interest of Emerson and NI shareholders. We look forward to continued engagement with NI and its advisors and moving swiftly towards an agreed transaction."

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