Emerson to buy rest of AspenTech

Surprising … well, no one … Emerson announced today that it will acquire all outstanding shares of AspenTech for $265.00 per share in an all-cash offer. Emerson already owns roughly 57% of shares, so this will be quite a large cash outlay: the minority stake is worth $7.2 billion, bringing the value of all of AspenTech to $17 billion. Emerson expects to finance the transaction from cash on hand and debt financing.

Why wasn’t it enough to own 57%? Because, said Emerson CEO Lal Karsanbhai, this is about portfolio transformation: “We are excited to fully integrate AspenTech into Emerson to advance our vision for software-defined control.” Back in 2022, when Emerson first talked about an AspenTech acquisition, its rationale was similar to when Siemens acquired UGS and Schneider Electric acquired AVEVA: software margins, a more strategic relationship with customers around critical software, and geographic and end-industry expansion. Specific to Emerson/AspenTech, there is also the opportunity for significant up-leveling of Emerson’s control systems since most of those systems and their buyers do not today have any AspenTech software.

Emerson announced its intentions back in November when it offered around $240/share, so the increase to $265/share is a nice premium for shareholders. I’ve read that this new offer more “meets market expectations”, which had the share at $255 or so on Friday — so it seems unlikely that a $240/share offer would have been successful.

Regulatory conditions, shareholder agreement, etc., are all still to be sorted out but the companies expect the deal to close in the first half of 2025. And after that, AspenTech will be a wholly-owned subsidiary of Emerson.

This deal isn’t as big as Synopsys buying Ansys ($35 billion-ish), but it is bigger than Siemens acquiring Altair ($11 billion-ish). Yes, the AspenTech deal started in 2022, so it isn’t an all-at-once-buy, but still, these are really big acquisitions, and the pressure is on to make them successful.

Read more here: https://www.prnewswire.com/news-releases/emerson-to-acquire-remaining-outstanding-shares-of-aspentech-302360359.html