Emerson Electric (NYSE:EMR) made a revised deal to buy National Instruments (NI) (NASDAQ:NATI) for $7 billion. Emerson’s shares have been trading down by 6.5% post-announcement, while NATI’s stock jumped by around 11%.
The new deal offers $53 per share in cash, as compared to the previous offer of $48 made in May. The new offer price depicts a 32% premium on the closing price of January 12.
Since May, Emerson has reached out multiple times to close the offer privately with NI. However, after it failed to get NI’s attention over the last eight months, Emerson decided on making the offer public.
Emerson Electric is a technology and engineering company that operates in two business segments: Automation Solutions, and Commercial & Residential Solutions. With this deal, Emerson is looking to build a portfolio with better margins and growth that is in sync with its automation goals. The company is eyeing huge profit and cash flow growth via NI’s portfolio.
NI develops hardware and software solutions for automated measurement systems.
Lal Karsanbhai, the company’s CEO, said, “We are transforming our portfolio toward higher-growth automation markets aligned with secular macro trends, which will deliver significant growth and profitability for years to come.”
Is Emerson Electric a Buy or Sell?
According to TipRanks analyst consensus, Emerson’s stock has a Moderate Buy rating, based on six Buy, and eight Hold recommendations.
The EMR target price is $103.45, which is 13.4% higher than the current price level.
