Emerson Electric merges software business with AspenTech in $ 11 billion deal


In an agreement to create a new AspenTech offering “a highly differentiated industrial software portfolio”, the assets of Emerson and AspenTech are expected to be combined to advance their software offerings to the mining, manufacturing and pharmaceutical industries.

Multinational technology and engineering firm Emerson Electric Co. (NYSE: EMR) is in the process of merging two of its software businesses with asset optimization software company Aspen Technology, Inc. (Nasdaq: AZPN) for an amount of $ 11 billion OK announced on October 11.

Specifically, Emerson will merge OSI Inc. and its geological simulation software business with AspenTech to create a new AspenTech with a diverse software portfolio “with greater scale, capabilities and technologies.”

Under the deal, Emerson will give $ 6 billion in cash to the new AspenTech, which will go to AspenTech shareholders. As a result, Emerson will own a 55% stake in the new AspenTech. The deal will accelerate Emerson’s software investment strategy as he builds his portfolio with the new AspenTech that is scalable and market relevant.

AspenTech shareholders will receive approximately $ 87 per share in cash and 0.42 share of the new AspenTech for each share of the original AspenTech, the equivalent of $ 160 per share. Shareholders will also own the remaining 45% of the new company.

In addition, the agreement will allow the new AspenTech to have a portfolio spanning the entire asset lifecycle and to expand into high growth markets with its blue chip customer base. This follows AspenTech’s announcement to invest $ 35 million in life sciences, metals and mining, which will help accelerate the uptake of new AspenTech products. OSI will allow the new entity to “develop its transmission and distribution offering to support the modernization of the electricity grid and ensure the reliability of the grid”, which will strengthen Emerson’s global expertise in life sciences.

The new AspenTech will remain based in Bedford, Massachusetts and the current CEO of AspenTech will be the CEO of the new company. There will be nine members of the board of directors of the new company, five of whom will be selected by Emerson. Current AspenTech Board Chair Jill Smith will serve as the new entity’s board chair.

The deal, which was unanimously approved by Emerson’s board and AspenTech directors in attendance. The transaction is expected to close in the second quarter of 2022, pending approval from AspenTech shareholders and regulatory authorities, among other customary closing conditions. The new entity will also be traded under AZPN on the NASDAQ.

Prior to the October 8 announcement, Emerson shares were valued at $ 96.64 and AspenTech shares were valued at $ 141.55. More than a week after the trade, after the market calmed down following the announcement, stock prices were $ 97.27 and $ 161.09 respectively for Emerson and AspenTech on October 20.

Emerson is represented by Davis Polk & Wardwell LLP and his financial advisers are Goldman Sachs & Co. LLC and Centerview Partners LLC.

AspenTech is represented by Skadden, Arps, Slate, Meagher & Flom LLP and his financial advisor is JP Morgan Securities LLC.


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