On January 17, 2023, Emerson announced a proposal to acquire National Instruments (NI) for $53 per share in cash at an implied enterprise value of $7.6 billion. The 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. This public proposal follows numerous attempts to engage constructively with NI in private since May 16, 2022.
Emerson urges NI shareholders to engage with their Board to ensure NI's public strategic review process is not merely another delay tactic. Emerson has organized the resources to work expeditiously toward a transaction with NI, has shared a merger agreement with NI and is prepared to transact promptly.
Immediate and Certain Cash Value for All NI Shareholders
- 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 differentiated electronic test and measurement offerings, and a technology stack of industry-leading intelligent devices, controls and software that complements Emerson’s technology stack in its core automation markets.
- With favorable long-term trends and an estimated priority target TAM of $35 billion, test and measurement is 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.
- Underscoring its commitment to consummating a transaction, Emerson has purchased 2.3 million shares of NI stock and has received approval under HSR1 to increase its stake.