Austin tech giant National Instruments reaches deal to be acquired … – Austin American-Statesman

Austin-based technology giant National Instruments has agreed to be acquired by Emerson Electric Co., in a deal valued at $8.2 billion.
The companies announced the deal Tuesday, several months after Emerson went public with interest in purchasing National Instruments and nearly a year after the St. Louis-based industrial and software firm first reached out privately.
In an announcement, Emerson said both companies’ boards of directors approved the $60-per-share cash deal, which is expected to close in the first half of Emerson’s 2024 fiscal year, following regulatory approvals and approval by National Instruments shareholders. Emerson already owns approximately 2.3 million shares of the stock, representing about 2% of outstanding shares. On Thursday, shares rose to a record high of $58.11.
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National Instruments, which rebranded to NI in 2020, is one of the Austin area’s largest tech employers and one of its longest-standing public companies. It was founded in 1976 and has more than 7,000 global employees, including about 2,700 workers in Austin. According to the acquisition announcement, NI saw $1.66 billion in revenue last year, has operations in more than 40 countries and has about 35,000 customers in industries including in the semiconductor, electronics, transportation, aerospace and defense markets. 
NI has long specialized in testing and measurement hardware, and in software systems that are used in a number of industries. The sale comes amid a push in the past several years by NI executives to focus on high-growth markets, including a focus on software and related services; electric and autonomous vehicles; wireless communications; and new space technologies, which executives said last year have led to growth and better profitability.
Emerson first went public with its interest in purchasing the Austin-based tech giant in January, within days of NI announcing it was exploring a potential sale and strategic review.
Emerson executives said they decided to go public with the purchase interest in the wake of NI’s announcement, after trying to make a deal for more than eight months and receiving rejections on its purchase offers. Emerson came forward with a $7.6 billion offer that would offer $53 per share to existing investors.
Emerson said it first reached out to NI about a potential acquisition in May 2022, and later that month initially offered $48 per share. At the time, according to a letter disclosed by Emerson, NI CEO Eric Starkloff wrote that its board had reviewed the offer with financial and legal advisers and unanimously decided it did not “provide a basis for further discussions.” In November, Emerson later upped the offer to $53 per share, a deal it proposed again in January before going public with the offer later that month.
Prior to the announcement that it was considering a potential sale, NI’s stock was trading around $46.96 per share. In January, when NI announced it was exploring a sale, it did not name any potential buyers and said there was no deadline or definitive timeline set for the strategic review. The company confirmed Emerson’s bid days later, and NI said it was holding a strategic review to allow all interested parties opportunities to participate.
In January, NI also adopted a shareholders rights plan, more commonly known as a poison pill, designed to defend against a hostile takeover by keeping potential buyers from acquiring a large stake in the company. The plan was set to expire in about a year. At the time, Emerson said it would challenge NI’s board if the company did not engage in negotiations, but it later dropped the bid once an auction to acquire NI opened.
According to a report from Reuters, other technology companies, including Fortive and Keysight Technologies, also were bidding to acquire NI. Citing anonymous sources with knowledge of the process, the report also said that NI had extended the deadline for bids several times in the past week, including a $60-per-share offer it received from Fortive. But the report said NI ultimately picked Emerson because of fewer risks in financing the deal and easier regulatory approval.
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In a statement Wednesday, Starkloff, who became NI’s CEO in 2020, said that, after considering a range of options, being acquired by Emerson was the best outcome.
“This transaction is a strong testament to the improvements and initiatives we’ve implemented in recent years that have transformed NI into a software-focused company with higher growth, better profitability and lower cyclicality,” Starkloff said. “We’re thrilled that Emerson recognizes the value we’ve created, and we believe they will help us build on our momentum to further position NI as a leading provider of software-connected automated test and measurement systems.”
The deal comes as Emerson has been working to become a major player in the automation industry, and it is expected to be a key step in the company’s strategy by helping build its capabilities in testing and measurement.
Lal Karsanbhai, president and chief executive officer of Emerson, said in a statement that the acquisition will help Emerson grow its products and expand its capabilities.
“These capabilities provide Emerson industry diversification into attractive and growing discrete markets like semiconductor and electronics, transportation and electric vehicles, and aerospace and defense that are poised to benefit from secular growth trends,” Karsanbhai said. “NI’s business is well-aligned with our vision for automation and we look forward to working together to bring more comprehensive and innovative solutions to our customers, accelerate growth and position Emerson to deliver significant shareholder value.”
The acquisition is expected to be financed by a mix of cash and liquidity. This includes plans by Emerson to use about $8 billion from divesting its climate technology unit to private equity group Blackstone last year.
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