Emerson proposes to acquire Aspen Technology for $240 per share in cash

Emerson (EMR) announced three strategic and financial actions in the final phase of its portfolio transformation. Emerson has made a proposal to acquire all outstanding shares of common stock of AspenTech (AZPN) not already owned by Emerson for $240 per share in cash. The proposed transaction follows Emerson’s 55% majority investment in AspenTech, which was completed in 2022. Emerson currently owns approximately 57% of AspenTech’s outstanding shares of common stock. Upon completion of the transaction, AspenTech would become a wholly owned subsidiary of Emerson. Emerson has commenced a process to explore strategic alternatives, including a cash sale, for the Safety & Productivity segment, which comprises the remaining businesses not related to automation in Emerson’s portfolio. Emerson plans to repurchase approximately $2B of its common stock in fiscal year 2025, with approximately $1B of the repurchase expected to be completed in the first quarter of fiscal year 2025. Emerson’s proposed $240 per share in cash to acquire all outstanding shares of AspenTech common stock not already owned represents a multiple of 29x consensus estimates for AspenTech’s fiscal year 2025 Adjusted EBITDA, a multiple consistent with the forward multiple paid in its original transaction for AspenTech. Emerson’s proposal represents a 35% premium to the company’s undisturbed share price of $177.84 on August 6, and an 8% premium to the undisturbed 52 week high of $221.94 through August 6, the date immediately prior to Emerson’s August 7 earnings call, when active transaction speculation began in the market, including in multiple published analyst reports. The proposal implies a fully diluted market capitalization for AspenTech of $15.3B and an enterprise value of $15.1B. Emerson expects the impact of this proposed transaction with synergies to be neutral to adjusted EPS in fiscal 2025. Emerson has delivered its proposal in a letter to AspenTech’s board of directors, filed with the SEC.