Emerson to Sell Network Power for $4 Billion to Platinum Equity
Emerson today announced an agreement to sell Network Power to Platinum Equity and a group of co-investors. The transaction is valued at $4 billion and Emerson will retain a subordinated interest in Network Power. The sale of Network Power is expected to close by December 31, 2016, subject to customary regulatory approvals.
The proposed sale marks Emersonâ€™s second divestiture to Platinum Equity in the last three years. In November 2013 Emerson sold a 51 percent controlling stake in its embedded computing and power business, which Platinum Equity rebranded Artesyn Embedded Technologies.
â€œThis agreement marks a major milestone in the strategic portfolio repositioning we announced last June,â€ said David N. Farr, Chairman and Chief Executive Officer of Emerson. â€œBy selling Network Power to Platinum Equity, we have achieved a successful result for our shareholders as part of our plan to streamline Emerson to create a more focused company with significant opportunities for growth and profitability in our core served markets. We believe Network Power has a bright future ahead and Platinum Equity is well-positioned to help the company continue to thrive and realize its full potential.â€
With revenue of approximately $4.4 billion in fiscal 2015, Network Power, based in Columbus, Ohio is a leading provider of thermal management, ac and Ddc power, transfer switches, services and information management systems for the data center and telecommunications industries.
"I'm very proud of the relationship and mutual trust that the Emerson and Platinum Equity teams have built with one another," said Platinum Equity Chairman and CEO Tom Gores. "Emerson is a world class company that we know shares our commitment to creating value, and this is an important investment in a business that will be a cornerstone in our portfolio. It plays to our core strengths. In addition to our capital resources, we will deploy our global operations skills to build on the foundation Emerson created and take this business to another level.â€
"Emerson has been a great long-term partner and we are pleased to collaborate again,â€ said Platinum Equity Partner Jacob Kotzubei. â€œWe have worked extensively with Emerson to customize a divestiture solution for Network Power that is beneficial for all sides and aligns with the long-term strategic goals of the business. Network Power is recognized as a global leader in infrastructure technologies and we are confident that working together with management we can further extend that position as a standalone company.â€
Network Power will continue to be led by Scott Barbour, who has been Executive Vice President of Emerson and Business Leader for Network Power. Barbour added, â€œWe firmly believe Platinum Equity is an ideal partner as we continue to drive efficiency in our operations and invest to bring innovative products and services to our customers. The work weâ€™ve done at Network Power in recent years ensures we are well prepared for an ownership transition and have the right foundation in place to be successful.â€