US tech giant Emerson to sell $4bn business unit
Investment firm Platinum Equity and a group of co-investors will purchase Emerson's Network Power business unit, a company statement confirmed
US technology giant Emerson announced an agreement to sell its Network Power business in a $4bn transaction.
Investment firm Platinum Equity and a group of co-investors will purchase Network Power, with Emerson set to retain a subordinated interest in the unit.
The sale is to be closed by 31 December, 2016, subject to regulatory approvals, Emerson said in a statement.
J P Morgan Securities and Centerview Partners served as financial advisors to Emerson, and Davis Polk & Wardwell served as the transaction's legal advisor.
Network Power, valued at $4.4bn in the 2015 fiscal year, provides thermal management, A/C and D/C power, transfer switches, and information management systems for data centres and the telecommunications industry.
Remarking on the agreement, David N. Farr, chairman and CEO of Emerson, said: "This agreement marks a major milestone in the strategic portfolio repositioning we announced last June.
"By 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."
Network Power will continue to be led by Scott Barbour, who is currently the executive vice-president of Emerson and business leader for Network Power.
The transaction is Emerson's second divestiture to Platinum Equity in the last three years.
Emerson sold a 51% controlling stake in its embedded computing and power business to Platinum Equity in November 2013, which was later rebranded Artesyn Embedded Technologies.