Emerson to buy remaining stake in AspenTech for $7.2 billion (updated)

Emerson Electric Co

27/01/2025 21:59

(Rewrites for context)
    By Sabrina Valle
       Jan 27 (Reuters) - U.S. industrial company Emerson
Electric  EMR.N  agreed to pay $7.2 billion to buy the remaining
shares in software supplier AspenTech  AZPN.O  that it does not
already own, the companies said on Monday.
    The takeout deal strengthens Emerson's transformation from
its 1890 origins as a motor and fan manufacturer in St. Louis
into an industrial technology company focused on factory floor
automation.
    Emerson agreed to pay proportionally more than the $6
billion it offered in 2022 to buy 55% of the software supplier,
then valued at roughly $11 billion. 
    The $265 per share offer, which implies an enterprise value
of $16.8 billion, also represents a premium of 10.4% from the
$240 per share offered in November. Emerson currently owns 57%
of AspenTech.
    "Most investors ultimately expected this higher offer price
and will likely view the announcement as a positive given its
modest dilution impact," said Ken Newman, an analyst with the
KeyBanc Capital Markets brokerage firm. 
    "Emerson's full ownership of AspenTech makes sense and
should help the company strengthen its automation portfolio,"
Newman said in a note to clients.
     Aspen's shares were up 3%, at $263, in afternoon trade.
    
    TECH REVAMP
    The deal follows other software acquisitions by centenary
industrial companies such as Siemens  SIEGn.DE  and Rockwell
Automation, as industrial clients seek to use digitalization and
artificial intelligence to cut costs and increase productivity. 
    AspenTech provides a variety of systems for industrial use,
from distribution management systems to geological simulation
software.
    Upon closing of the transaction, which is expected by June,
AspenTech will become a wholly-owned subsidiary of Emerson. 
    Emerson plans to finance the acquisition with its existing
cash on hand and debt financing.
    Goldman Sachs and Centerview Partners are financial advisors
to Emerson, while Qatalyst Partners and Citi are serving as
independent financial advisors to AspenTech.


 (Reporting by Sabrina Valle in New York and Utkarsh Shetti in
Bengaluru; Editing by Shailesh Kuber and Rod Nickel)
 ((UtkarshUmesh.Shetti@thomsonreuters.com;))