Benzinga | Oct 11, 2021 06:57AM EDT

Emerson To Accelerate Software Strategy To Capitalize On High Growth Industry Verticals And Technology Segments In Transaction With AspenTech

Emerson (NYSE:EMR) and AspenTech (NASDAQ:AZPN) today announced that the companies have entered into a definitive agreement to contribute Emerson's industrial software businesses -- OSI Inc. and the Geological Simulation Software business -- to AspenTech to create a diversified, high-performance industrial software leader with greater scale, capabilities and technologies ("new AspenTech"). Emerson will also contribute $6.0 billion in cash to new AspenTech, which will be received by AspenTech shareholders, in exchange for a 55% stake in new AspenTech. New AspenTech will offer a highly differentiated industrial software portfolio with the capabilities to support the entire lifecycle of complex operations across a wide range of industry verticals, including design and engineering, operations, maintenance and asset optimization.

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Accelerating Emerson's Industrial Software Strategy

The transaction accelerates Emerson's software investment strategy as the company continues to build a higher growth, more diversified and sustainable portfolio, by creating an industrial software company with immediate scale and relevancy in a fast-paced and evolving market. The new company, which will retain the name AspenTech, enables Emerson to realize significant synergies and accelerate its software strategy to drive meaningful value creation. Majority ownership position in a highly valued, pure-play industrial software leader will give Emerson the platform and flexibility to strategically deploy capital for growth through continued investment and M&A. The transaction continues Emerson's long history of delivering shareholder value. New AspenTech will be fully consolidated into Emerson financials and is expected to be accretive to adjusted EPS after year one.