Emerson to Accelerate Software Strategy to Capitalize on High Growth Verticals and Technology Segments in Transaction with AspenTech



Emerson to Accelerate Software Strategy to Capitalize on High Growth Verticals and Technology Segments in Transaction with AspenTech

The new AspenTech will become a driver of both acquisition and organic growth

DUBAI, United Arab Emirates, October 13, 2021 / APO Group / –

Emerson ( to receive 55% stake in New AspenTech; AspenTech shareholders will receive approximately $ 87 per share in cash and 0.42 share of new AspenTech for each share of AspenTech, offering a 45% increase; The new AspenTech is expected to deliver double-digit annual spend growth, best-in-class profitability, strong free cash flow and be positioned to continue and complete strategic transactions; Emerson reaffirms the underlying sales forecast for fiscal 2021 from 5% to 6% and the forecast for adjusted EPS from $ 4.06 to $ 4.08.

Emerson (NYSE: EMR) and AspenTech (NASDAQ: AZPN) announced today that the companies have entered into a definitive agreement to bring in Emerson’s industrial software business – OSI Inc. and geological simulation software business – at AspenTech to create a leader in industrial performance software with greater scale, capabilities and technologies (“new AspenTech”). Emerson will also contribute $ 6.0 billion in cash to the new AspenTech, which will be received by AspenTech shareholders, in exchange for a 55% stake in the new AspenTech. New AspenTech will offer a highly differentiated industrial software portfolio with the capabilities to support the full lifecycle of complex operations across a wide range of verticals including design and engineering, operations, maintenance and asset optimization.

Acceleration of Emerson’s industrial software strategy

Transaction accelerates Emerson’s software investment strategy as the company continues to build a higher growth, more diverse and sustainable portfolio, creating an industrial software company with immediate scale and relevance in a market rapidly changing and rapidly changing. The new company, which will retain the AspenTech name, enables Emerson to achieve significant synergies and accelerate its software strategy to generate significant value creation. The majority ownership position in a leader in pure and highly regarded industrial software will give Emerson the platform and flexibility to strategically deploy capital for growth through continued investments and mergers and acquisitions. The transaction continues Emerson’s long history of creating shareholder value. New AspenTech will be fully consolidated into Emerson’s financial data and is expected to have an accretive effect on adjusted EPS after the first year.

Management comments

“We saw an exciting opportunity to accelerate our software strategy to capitalize on the rapidly changing industrial software landscape and advance the journey of Emerson’s high-value portfolio,” said Lal Karsanbhai, president and chief executive officer. Emerson’s leadership. “Our customers are increasingly looking for partners to help them achieve better performance by automating workflows in their facilities to optimize operations. New AspenTech will become a driver of both acquisition and organic growth.

“Today’s announcement marks an exciting new era. This transaction allows us to strengthen our position as a global and highly diversified industrial software leader, poised to experience significant growth, strong financial performance and a vehicle to drive future software acquisitions, while delivering immediate monetary value to companies. AspenTech shareholders, ”said Antonio Pietri, president and CEO of AspenTech, who will lead the new AspenTech. “The new AspenTech will benefit from a larger and more diverse market, which we can serve with a comprehensive software portfolio, an expanded global sales channel and an even stronger balance sheet strengthened by Emerson. In addition, this transaction expands our ability to support our clients’ global sustainability ambitions.

Emerson and AspenTech Create Leader in High-Performance Software with Scalability and Technology

After the transaction closes, the new AspenTech will have a global footprint with strong go-to-market capabilities and more than 3,700 employees. On a pro forma basis, the new AspenTech is expected to generate annual revenue of $ 1.1 billion for fiscal 22, adjusted EBITDA of approximately $ 490 million, and double-digit annual expense growth to ‘in 2026. The new AspenTech will have a predictable, high-growth business model with 86% of pro forma software revenue and 14% of services revenue.

The new AspenTech will be an attractive environment for highly sought-after software talent, providing career opportunities to innovate in a technology-driven culture.

The advantages of the transaction include:

New AspenTech Portfolio Covers Full Asset Lifecycle: New AspenTech will deliver differentiated offerings in industrial AI and asset optimization with Emerson’s network modernization technology, advanced power management systems distribution and geological simulation software. Thanks to Emerson’s strong capabilities, the new AspenTech will have an end-to-end software offering and will be even better positioned to help customers improve their safety, reliability and production while reducing emissions.

Diversified end markets with blue chip customer base: With the additional capabilities of OSI Inc. and geological simulation software, the new AspenTech will expand into new high growth markets. AspenTech recently announced its commitment to invest $ 35 million in life sciences, metals and mining, which will help accelerate adoption of new AspenTech solutions. The addition of OSI Inc. will allow the new AspenTech to develop its transmission and distribution offering to support the modernization of the electricity network and ensure the reliability of the network.

Significant Revenue and Cost Synergy Opportunities: Over time, the new AspenTech is expected to generate significant revenue and synergy opportunities by shifting OSI Inc. and the geological simulation software business to a business model based on tokens and subscriptions, which AspenTech has managed to achieve for its wallets. New AspenTech expects to provide multiple specific revenue growth opportunities by leveraging Emerson’s $ 120 billion global installed base and sales force of nearly 12,000 vendors.

Leading Financial Profile: New AspenTech will be a leading player in the industrial software market with scale and strong free cash flow generation to drive innovation and growth. On a pro forma basis, the company is expected to generate double-digit growth in revenue and free cash flow over the next five years.

Strong Platform for Future Acquisitions: Mergers and Acquisitions will be a key pillar of AspenTech’s forward-looking strategy given the continued evolution and consolidation of the industrial software industry. With an expanded solution set, a larger global footprint and a larger installed base, the new AspenTech will have access to a wider range of acquisition and investment objectives across all industries, products and geographies.

Emerson’s performance outlook for fiscal 2021

On August 4, 2021, Emerson provided an underlying sales forecast for fiscal 2021 of 5% to 6% and an adjusted EPS forecast of $ 4.06 to $ 4.08. Emerson reaffirms this direction and will deliver full results on November 3, 2021.

AspenTech Provides Preliminary Update on First Quarter Fiscal 2022 Results

AspenTech expects annual spend to be approximately $ 629 million at the end of the first quarter of

fiscal year 2022, which represents an increase of 5.5% compared to the first quarter of fiscal 2021.

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