Transaction Represents Important
Simplification Milestone in Emerson's Portfolio
Transformation
ST.
LOUIS and NEW YORK,
June 6,
2024 /PRNewswire/ -- Emerson (NYSE: EMR) announced
today that it has entered into a definitive agreement to sell its
remaining interests in the Copeland joint venture (formerly Emerson
Climate Technologies) for a transaction value of approximately
$3.5 billion, with pre-tax cash
proceeds of $3.4 billion, net of the
release of $0.1 billion of future
indemnity obligations. Private equity funds managed by Blackstone
("Blackstone") will purchase Emerson's 40% common equity ownership
in the joint venture, while Copeland will repurchase the seller's
note.
"This transaction is a key step to simplify our portfolio and
enhance Emerson's focus as a global leader in automation," said Lal
Karsanbhai, President and Chief Executive Officer of Emerson. "We
believe now is the right time to execute our plans to fully exit
the Copeland business. This agreement with Blackstone provides
certainty and portfolio simplification to Emerson shareholders,
while enhancing our focus on executing in our attractive, high
growth automation markets."
"We appreciate Emerson's partnership and are pleased to reach
this agreement to acquire full ownership of Copeland," commented
Joe Baratta, Global Head of
Blackstone Private Equity. "Copeland has a world-class team that is
helping lead the transition to more energy efficient heating and
cooling solutions – and we are excited to continue supporting its
accelerated growth in the years ahead."
The transactions have been unanimously approved by Emerson's
Board of Directors and are expected to close in the second half of
calendar year 2024, subject to regulatory approvals and customary
closing conditions. The transactions are expected to result in a
net pretax gain of approximately $0.2
billion. Emerson intends to use the approximate $2.9 billion after-tax cash proceeds to pay down
its existing debt obligations.
A wholly owned subsidiary of the Abu Dhabi Investment Authority
(ADIA) and GIC will invest alongside Blackstone as part of the
transaction.
Advisors
Davis Polk
& Wardwell LLP served as legal advisor and Goldman Sachs &
Co. LLC served as exclusive financial advisor to Emerson.
Joele Frank, Wilkinson Brimmer
Katcher served as investor relations advisor to Emerson. Barclays
served as lead financial advisor and Simpson Thacher &
Bartlett LLP acted as legal counsel to Blackstone and Copeland. RBC
Capital Markets, LLC also provided financial advisory services to
Blackstone and Copeland. Debt financing related to the transaction
is being led by RBC Capital Markets, LLC, Barclays, Goldman Sachs
Bank USA, Sumitomo Mitsui Banking
Corporation, and Wells Fargo.
About Emerson
Emerson (NYSE: EMR) is a global
technology and software company providing innovative solutions for
the world's essential industries. Through its leading automation
portfolio, including its majority stake in AspenTech, Emerson helps
hybrid, process and discrete manufacturers optimize operations,
protect personnel, reduce emissions and achieve their
sustainability goals. For more information,
visit Emerson.com.
About Blackstone
Blackstone is the world's largest
alternative asset manager. We seek to deliver compelling returns
for institutional and individual investors by strengthening the
companies in which we invest. Our more than $1 trillion in assets under management include
global investment strategies focused on real estate, private
equity, infrastructure, life sciences, growth equity, credit, real
assets, secondaries and hedge funds. Further information is
available at www.blackstone.com. Follow @blackstone
on LinkedIn, X (Twitter), and Instagram.
Forward-Looking and Cautionary Statements
Statements in this press release that are not strictly
historical may be "forward-looking" statements, which involve risks
and uncertainties, and Emerson undertakes no obligation to update
any such statements to reflect later developments. These risks and
uncertainties include the scope, duration and ultimate impacts of
the Russia-Ukraine and other global conflicts, as well as
economic and currency conditions, market demand, pricing,
protection of intellectual property, cybersecurity, tariffs,
competitive and technological factors, inflation, among others, as
set forth in the Company's most recent Annual Report on Form 10-K
and subsequent reports filed with the SEC. The outlook contained
herein represents the Company's expectation for its consolidated
results, other than as noted herein.
Emerson uses our Investor Relations website,
www.Emerson.com/investors, as a means of disclosing information
which may be of interest or material to our investors and for
complying with disclosure obligations under Regulation FD.
Accordingly, investors should monitor our Investor Relations
website, in addition to following our press releases, SEC filings,
public conference calls, webcasts and social media. The information
contained on, or that may be accessed through, our website is not
incorporated by reference into, and is not a part of, this
document.
Contacts
For Emerson:
Investors:
Colleen
Mettler
(314) 553-2197
Media:
Joseph Sala /
Greg Klassen
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
For Blackstone:
Matt Anderson
Matthew.Anderson@blackstone.com
(212) 390-2472
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SOURCE Emerson