Emerson Electric said it would combine its software units with smaller rival Aspen Technology in a deal for about $11 billion to boost its industrial automation business offering it to a variety of sectors from utilities and mining to chemicals and automobiles.
The resulting industrial software company will include Emerson’s network development technologies and geological simulation software, as well as AspenTech’s software for mining, manufacturing and the pharmaceutical industry, and the company’s resulting software will meet the sustainability needs of clean energy markets such as biofuels, hydrogen and reduce the carbon footprint in the environment.
The value of the cash and stock transaction is approximately $160 per share. AspenTech shareholders will receive $87 and a share of 0.42 of the resulting company’s stock for each share they currently own, representing a value about 27% higher than the closing price of AspenTech’s stock on October 6, prior to the announcement of talks between the two companies, and about 13% higher than the closing price of the company’s stock on Friday.
Emerson has stated that it will acquire a 55% stake, while AspenTech shareholders will have the rest of the new company, which will retain the AspenTech name, and will be managed by current CEO “Antonio Petri.” Analysts believe that this deal, which is expected to close during the second quarter of 2022, will start earning adjusted profits after only one year.
AspenTech has a market value of $9.49 billion, while Emerson has a valuation of more than $57 billion.