Emerson Electric to sell majority stake in embedded computing business for $300 mn
06 August 2013
Diversified US manufacturer Emerson Electric Co today said that it would sell a majority stake in its embedded computing and power business to private-equity firm Platinum Equity, for about $300 million.
The St. Louis-based company will sell 51-per cent stake in the unit and retain the remaining 49 per cent non-controlling interest. The unit will operate as an independent company.
''After extensive consideration, we have found an arrangement to exit this business in a manner that maximizes its value for our shareholders,'' said Emerson chairman and CEO, David Farr.
''The embedded computing and power business is a technology leader in the industry it serves, but no longer fits strategically in our portfolio. The transaction with Platinum will allow us to immediately focus on our core businesses while also participating in the upside from repositioning the business as it focuses on growth as an independent company,'' he added.
With revenue of approximately $1.4 billion in 2012, Emerson's embedded computing and power business, based in California, is a market leader in the design and supply of technologies used in communications and computing equipment and other applications.
"We have forged a strong partnership with Emerson, coming together in a way that will create success for everyone,'' said Platinum Equity chairman and CEO, Tom Gores. ''We will build on the foundation established under Emerson to further position the business as a strong and innovative competitor in the marketplace.''
The transaction is expected to close in approximately three to six months, upon securing regulatory approvals in various countries.
Post closing, sales and earnings from the embedded computing and power business will continue to be reported in Emerson's 2013 results, which will include a noncash pretax goodwill impairment of $503 million related to the business.
With annual revenues of $24.4 billion, Emerson is a diversified global manufacturing company specializing in process management, industrial automation, network power, climate technologies, and commercial & residential solutions.