Emerson's majority interest in its embedded computing & power business sold to Platinum Equity
NewsAugust 06, 2013
CARLSBAD, CA. Officials at Emerson announced that they have signed an agreement to sell a 51 percent stake in the company's embedded computing and power business to Platinum Equity in Los Angeles. Under the deal, Emerson will get about $300 million in cash and will keep a 49 percent non-controlling interest in the business, which will then operate as an independent company.
Emerson’s embedded computing and power business in Carlsbad, CA, had revenue of about $1.4 billion in 2012.
“After extensive consideration, we have found an arrangement to exit this business in a manner that maximizes its value for our shareholders,” says David N. Farr, Emerson Chairman and CEO. The embedded computing and power business no longer fits strategically in Emerson's portfolio, Farr says.
Closing on the transaction is expected in about three to six months, once regulatory approvals in various countries are secured.After completion Emerson’s interest in the new entity will be reported using the equity method of accounting. Sales and earnings resulting from the embedded computing and power business will continue to be reported in Emerson’s 2013 results, which also will include a non-cash pretax goodwill impairment of $503 million that is related to the business. Share repurchase also will be increased by $600 million to offset associated earnings dilution.
Today at 2 p.m. ET, Emerson management personnel will discuss third quarter 2013 results and more details of this transaction during a conference call. To listen in over the Internet, visit www.Emerson.com/financial and completing a brief registration form. A replay of the conference call will be available for about three months.
