FILE PHOTO: Emerson Electric Co is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS/Brendan McDermid/File Photo
(Reuters) -Emerson Electric on Tuesday proposed to buy the rest of AspenTech that it does not own at a valuation of $15.1 billion, sharpening its focus on industrial automation.
The company in 2021 merged its software units with smaller rival Aspen Technology to own about 55% in the combined entity.
Emerson has offered $240 per share in cash for the rest of the industrial software technology provider. The company will pay about $6.53 billion for the stake, according to a Reuters calculation.
AspenTech's shares climbed about 5% to $249.80 in premarket trade on Tuesday. Emerson's stock rose about 4.9% after the company announced a new buyback program and provided a largely upbeat fiscal 2025 profit forecast.
Emerson, founded a century ago, has streamlined its portfolio over the past few years to reposition as a technology-focused company. It has benefited from companies modernizing their factory floors to include more automation.
The company has also started to explore options, including a cash sale, for its Safety & Productivity unit, which comprises businesses not related to its automation portfolio. The segment contributed $1.4 billion of sales in fiscal 2024.
Emerson will not proceed with the deal unless a special committee that includes directors appointed by AspenTech and advised by independent legal and financial advisers recommends.
The transaction is not subject to any financing condition, the company said.
Emerson will buy back about $2.0 billion of its common stock in fiscal year 2025, with about $1.0 billion expected to be completed in the first quarter.
Separately, the company said it expects its 2025 profit per share to be between $5.85 and $6.05, the midpoint of which is above analysts' average estimate of $5.89, according to data compiled by LSEG.
(Reporting by Nathan Gomes in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)
