Emerson Acquires NI in $8.2B Deal
Emerson, a global technology and engineering company, has announced its acquisition of NI, a software-connected automated test and measurement systems provider, for $8.2 billion in equity value. NI's solutions are designed to help businesses bring products to market faster and at a lower cost, and the company operates in over 40 countries with approximately 35,000 customers.
This acquisition is expected to help Emerson (News - Alert) enhance its automation capabilities, gain a broader set of customers and diversify into attractive and growing markets such as semiconductor and electronics, transportation, and aerospace and defense.
NI's business is aligned with Emerson's vision for automation, and the acquisition is expected to bring more comprehensive and innovative solutions to customers, accelerate growth, and position Emerson to deliver significant shareholder value. The strategic and financial rationale for this acquisition is strong, with Emerson expecting to achieve $165 million in cost synergy opportunities by the end of year five, as well as improve its financial profile with attractive returns for shareholders.
NI has undergone significant transformations in recent years, becoming a software-focused company with higher growth, better profitability, and lower cyclicality. The company's CEO, Eric Starkloff, commented that the transaction represents the best outcome for all NI stakeholders, and is a strong testament to the improvements and initiatives the company has implemented.
Emerson's President and CEO, Lal Karsanbhai, said that NI's 'best-in-class test and measurement product and software offerings accelerate Emerson's progress toward a cohesive, higher growth and higher margin automation portfolio.' With favorable long-term trends and an estimated priority total addressable market of $35 billion, the test and measurement market is fast-growing and highly complementary, making it one of the four priority adjacencies that Emerson presented at its 2022 Investor Conference.
This acquisition is expected to increase Emerson's end market exposure in discrete markets to 18% of sales, which will be the company's second-largest industry segment.Emerson and NI share innovation-focused engineering cultures, and with Emerson's proven track record of successful new product launches and innovation, the combined company will be able to accelerate and expand the development of innovative offerings for customers leveraging the complementary expertise of both organizations.
Edited by Greg Tavarez
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