Emerson Electric Co. (NYSE:EMR) entered into a definitive agreement to acquire 55% stake Aspen Technology, Inc. (NasdaqGS:AZPN) (AspenTech) for $6 billion on October 10, 2021. Pursuant to the terms of the transaction, Emerson will contribute industrial software businesses, OSI Inc. and the Geological Simulation Software business, to AspenTech to create new AspenTech. Emerson will also contribute $6 billion in cash to new AspenTech, which will be received by AspenTech shareholders, in exchange for a 55% stake in new AspenTech and former AspenTech stockholders will own the remaining outstanding New AspenTech common stock. Under the terms of the agreement, AspenTech shareholders will receive approximately $87 per share in cash and 0.42 shares of common stock of the new AspenTech, for each share of AspenTech common stock they own, which implies total consideration of approximately $160 per AspenTech share, and a total transaction equity value of approximately $11 billion before synergies. Including expected synergies, the total value increases to $176 per share, a 40% premium compared to AspenTech’s closing stock price on October 6, 2021. Upon completion of the transaction, Emerson will own 55% of the new AspenTech on a fully diluted basis and AspenTech shareholders will own 45%. The new company, will retain the name AspenTech.
The agreement contains certain termination rights for each of Emerson and AspenTech, including the right of each party to terminate the agreement if the transaction has not been consummated by October 10, 2022. Under the agreement, AspenTech is required to pay a termination fee in the amount of $325 million to Emerson in certain events. New AspenTech will be headquartered in Bedford, Massachusetts and Antonio Pietri, President and Chief Executive Officer of AspenTech, will lead the company. Following the close of the transaction, the Board of Directors of new AspenTech will consist of nine directors, five of whom will be designated by Emerson. Jill Smith, the current Chair of the Board of Directors AspenTech, will serve as Chair of the Board of Directors of new AspenTech. The transaction is subject to approval by AspenTech shareholders, the effectiveness of the registration statement on Form S-4 to be filed by New AspenTech with the SEC and the approval of the listing on Nasdaq of the shares of New AspenTech common stock to be issued in the transactions, the approvals under applicable regulatory and competition laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the pre-closing restructuring shall have been completed in all material respects, antitrust approval in Russia and South Korea, and other customary closing conditions. The transaction has been approved unanimously by Emerson’s Board of Directors, and by unanimous vote of those AspenTech directors present (one director was absent but confirmed full support). Upon completion of the transaction, new AspenTech will trade on NASDAQ under ticker symbol AZPN. As of December 2, 2021, Aspen Technology received approval from Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and antitrust clearance from the Austrian Federal Competition Authority. The transaction is expected to close in the second calendar quarter of 2022. New AspenTech will be fully consolidated into Emerson financials and is expected to be accretive to adjusted EPS after year one. Goldman Sachs & Co. LLC and Centerview Partners LLC acted as financial advisors while Phillip R. Mills, Marc O. Williams, Cheryl Chan, Ronan P. Harty, Michael Mollerus, Pritesh P. Shah, Jeffrey P. Crandall and Travis Triano of Davis Polk & Wardwell LLP acted as legal advisor for Emerson. J.P. Morgan Securities LLC acted as financial advisor and provided fairness opinion to the Board of AspenTech. Graham Robinson, Moshe Spinowitz, Resa Schlossberg, Kenneth Schwartz, Giorgio Motta, Chadé Severin, Regina Olshan, Rob Saunders and Joseph Larkin of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors for AspenTech. Innisfree M&A Inc. acted as proxy solicitor to Aspen. American Stock Transfer & Trust Company, LLC acted as transfer agent to Aspen. Stephen M. Kotran of Sullivan & Cromwell LLP acted as legal advisor to Emerson Electric Co. (NYSE:EMR).
Emerson Electric Co. (NYSE:EMR) completed the acquisition of 55% stake Aspen Technology, Inc. (NasdaqGS:AZPN) on May 16, 2022. As of May 16, 2022, Aspen Technology, Inc. changed its name to AspenTech Corporation. Simpson Thacher acted as legal advisor to J.P. Morgan Securities LLC in the transaction.