Emerson agreed to sell a 51 percent stake in its embedded computing and power business to Platinum Equity for $300 million in cash. Emerson will retain a 49 percent noncontrolling interest in the business, which will operate as an independent company. Share repurchase will be increased by $600 million to offset associated earnings dilution.
Emerson’s embedded computing and power business, which is based in Carlsbad, California, had 2012 revenue of approximately $1.4 billion. It supplies embedded computing solutions based on open standards such as ATCA, AdvancedMC, CompactPCI, COM Express, OpenVPX and VMEbus.
“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 Chief Executive Officer David N. 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.”
“We have forged a strong partnership with Emerson, coming together in a way that will create success for everyone,” said Platinum Equity Chairman and Chief Executive Officer 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.”
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