(Bloomberg) -- Emerson Electric Co. agreed to acquire measurement systems maker National Instruments Corp. in a deal valued at $8.2 billion following a long pursuit.
St. Louis-based Emerson will buy National Instruments for $60 per share in cash, according to a statement Wednesday, which confirmed an earlier Bloomberg News report. The price represents a 49% premium to National Instruments’ closing price on Jan. 12, the day before the company announced a strategic review.
Emerson beat out smaller rival Fortive Corp. in a competitive process for National Instruments, people with knowledge of the matter said earlier. Shares of Emerson were down 1.7% in pre-market trading Wednesday in New York, while National Instruments was up 8.6% to $57.10 before being halted for the announcement.
The back-and-forth over Austin, Texas-based National Instruments, which provides hardware and software for engineers and scientists, has gone on for almost a year. Emerson said in January that it had made more than one offer to buy the company since May 2022, but National Instruments separately said at the time that it wanted to talk to other potential buyers before making a decision.
Automation Drive
Emerson makes heating, ventilation and refrigeration systems for commercial and residential use. It’s been transforming its portfolio in recent years to focus on its higher-growth automation division, which helps other businesses improve the performance of their operations.
Chief Executive Officer Lal Karsanbhai said earlier this year in one of Emerson’s public letters that buying National Instruments—which operates in 40 countries serving customers in the semiconductor, electronics, transport and defence sectors—would help it generate better growth and a higher-margin portfolio.
Read More: National Instruments Co-Founder Backs $7 Billion Emerson Offer
The deal will boost the combined Emerson portfolio’s gross margins and will be immediately accretive to its adjusted earnings per share and long-term targets, according to Wednesday’s statement. Emerson expects $165 million of cost savings from the deal by the end of the fifth year.
Emerson plans to finance the purchase using available cash, including proceeds from the pending sale of a majority stake in its Climate Technologies business to Blackstone Inc., it said in the statement. The companies expect the deal to close in the first half of Emerson’s 2024 financial year, subject to regulatory clearance and approval by National Instruments shareholders.
Goldman Sachs Group Inc. and Centerview Partners advised Emerson on the deal, while National Instruments worked with Bank of America Corp.
(Updates with share movement, deal details from third paragraph.)
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