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Emerson Electric Co. (EMR) - free report >>
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Emerson Electric Co. (EMR) - free report >>
Applied Industrial Technologies, Inc. (AIT) - free report >>
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Emerson (EMR) Closes NI Deal, Expands Automation Foothold
Emerson Electric Co. (EMR - Free Report) has completed its previously announced acquisition of National Instruments Corp or NI for an enterprise value of $8.2 billion. The acquisition is in sync with EMR’s focus on global automation to drive growth and profitability.
Headquartered in Austin, TX, NI produces automated test equipment and virtual instrumentation software. NI generated revenues of $1.66 billion last year.
The transaction strengthens EMR’s global automation foothold, helping the company expand into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles and aerospace and defense.
Emerson Electric Co. Price
Emerson Electric Co. price | Emerson Electric Co. Quote
Apart from expanding automation capabilities, the acquisition opens up industrial software opportunities for EMR, thanks to 20% of NI’s sales generated from software.
Emerson expects the transaction to generate cost savings of $165 million by the end of the fifth year upon completion. The buyout is immediately accretive to EMR’s adjusted earnings. The acquisition will also generate significant recurring revenues and improve the company’s gross margins.
Emerson will report the results of National Instruments under a new sub-segment — Test & Measurement, within the Software and Control group.
Zacks Rank & Other Stocks to Consider
Emerson carries a Zacks Rank #2 (Buy) at present. Some other top-ranked stocks within the broader Industrial Products sector are as follows:
Axon Enterprise (AXON - Free Report) sports a Zacks Rank #1 (Strong Buy) at preset. The company pulled off a trailing four-quarter earnings surprise of 60.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Axon has an estimated earnings growth rate of 62.1% for the current year. The stock has rallied around 82% in a year.
Applied Industrial Technologies (AIT - Free Report) also flaunts a Zacks Rank #1 at present. The company delivered a trailing four-quarter earnings surprise of 15%, on average.
Applied Industrial has an estimated earnings growth rate of 4.3% for the current fiscal year. The stock has surged 45.8% in a year.