Global technology and software company Emerson has announced it has closed its acquisition of National Instruments (NI), a provider of software-connected automated test and measurement systems, at an equity value of US$8.2bn (£6.75m).
The acquisition of NI is expected to advance Emerson’s position as a global automation player and expands its opportunity to capitalise on key secular trends such as nearshoring, digital transformation, sustainability and decarbonisation.
NI brings a portfolio of software, control and intelligent devices that is expected to accelerate Emerson’s revenue growth aligned to its 4-7% through the cycle organic growth target.
The acquisition of NI also increases Emerson’s end market exposure in discrete markets, which will be Emerson’s second largest industry segment, and with approximately 20% of sales in software, NI also increases Emerson’s exposure to high-growth industrial software markets.
Furthermore, the acquisition increases Emerson’s gross profit, with further adjusted EBITA margin expansion opportunities as Emerson delivers an expected US$165m (£135.5m) of cost synergy opportunities by the end of year five through application of best practices from the Emerson Management System.
“Our acquisition of NI is a significant milestone in our efforts to transform Emerson and realise our vision of increasing growth, cohesiveness and end market diversification across Emerson’s portfolio,” said Emerson president and CEO Lal Karsanbhai.
“We are pleased to welcome NI employees to Emerson and benefit from our shared visions and cultures, including our mutual commitment to innovation, operational excellence and sustainability.
“Together, we look forward to providing our customers more innovative and differentiated products, executing on our synergy targets and delivering increased shareholder value.”
NI will become a new reported segment within Emerson called Test & Measurement and will be consolidated into the Software and Control group. The Test & Measurement business will continue to be headquartered in Austin, Texas.
NI reported US$1.66bn (£1.36bn) in 2022 revenue and operates in more than 40 countries, serving approximately 35,000 customers across semiconductor and electronics, transportation and aerospace and defense markets.
Ritu Favre has been appointed to lead the Test & Measurement segment as business group president. Favre joined NI in 2019 as senior vice president and general manager of the semiconductor business and was promoted to executive vice president of business units in 2022.
As a result of the transaction’s closing, NI’s common stock has ceased trading on the Nasdaq.