National Instruments Acquisition: Key Details, Impact, and What Comes Next

Emerson's acquisition of National Instruments (NI) for $8.2 billion marks a significant milestone in the automation industry. This strategic move aims to enhance Emerson's capabilities in software-connected automated test and measurement systems, positioning the company as a global leader in automation. The integration of NI's advanced technologies is expected to drive revenue growth and expand market opportunities in key sectors.

What Is National Instruments?

Founded in 1976, National Instruments (NI) specializes in test and measurement systems, now part of Emerson. NI's core products include software like LabVIEW and TestStand, and hardware such as data acquisition devices and PXI instrumentation. Unique in its market, NI offers a wide portfolio of modular instruments and configurable software interfaces, focusing on next-generation technologies like 5G and autonomous driving. Their comprehensive solutions span from desktop design to automated production test systems, promoting standardization to enhance productivity.

Who Acquired National Instruments?

Emerson is a global technology, software, and engineering powerhouse, driving innovation to make the world healthier, safer, smarter, and more sustainable. The company offers a range of solutions focused on technology, software, and engineering, with initiatives in sustainability, innovations, and STEM education. Positioned as a leader in its industry, Emerson has a significant global presence and influence, underscored by its extensive regional sites and commitment to impactful changes worldwide.

When Was National Instruments Acquired?

Emerson completed its acquisition of National Instruments on October 11, 2023. This strategic move comes at a time when the industry is experiencing significant trends such as nearshoring, digital transformation, and sustainability. The timing aligns with the increasing demand for advanced automation and digital solutions across various sectors, including semiconductor, electronics, transportation, and aerospace. This acquisition is expected to bolster Emerson's capabilities and market presence in these high-growth areas.

Why Was National Instruments Acquired?

• Market Expansion: The acquisition of National Instruments significantly enhances Emerson's market reach, particularly in high-growth sectors such as semiconductor, electronics, transportation, and aerospace. NI's presence in over 40 countries and its service to approximately 35,000 customers make it Emerson's second-largest industry segment, diversifying its market exposure and driving growth.
• Technology Integration: National Instruments brings a robust portfolio of software, control, and intelligent devices that complement Emerson's existing technology stack. This integration is expected to accelerate revenue growth and innovation, with NI's flexible and modular system-level test solutions enabling continuous evolution and automation of test processes. The new Test & Measurement segment will be part of Emerson's Software and Control group, leveraging NI's expertise to enhance product offerings.
• Competitive Advantage: The acquisition strengthens Emerson's competitive position by delivering $165 million in cost synergies by the end of year 5 through operational excellence and productivity improvements. NI's strong presence in high-growth industrial software markets and its innovative solutions will enhance Emerson's ability to solve complex test and measurement challenges, providing a significant edge over competitors.

Acquisition Terms

• Acquisition Price: $8.2 billion
• Payment Method: Cash offer of $60 per share
• Key Conditions or Agreements:
  • The transaction has been approved by the Boards of Directors of both Emerson and NI.
  • NI shareholders will receive $60 per share in cash.
  • The transaction represents a 49% premium to NI’s closing share price as of January 12, 2023.
  • The transaction is expected to close in the first half of Emerson’s fiscal 2024, subject to customary closing conditions, including regulatory approvals and approval by NI shareholders.
  • NI will become a new reported segment within Emerson called Test & Measurement, headquartered in Austin, Texas.
  • NI's common stock has ceased trading on the Nasdaq.
  • Emerson expects to deliver $165 million of cost synergy opportunities by the end of year 5 through the application of best practices from the Emerson Management System.
  • Ritu Favre has been appointed to lead the Test & Measurement segment as Business Group President.

Impact on National Instruments

The acquisition of National Instruments (NI) by Emerson has led to significant changes in operations and management. NI now operates as the Test & Measurement business group within Emerson, headquartered in Austin, Texas. Ritu Favre has been appointed as the Business Group President, ensuring continuity for customers with no changes to points of contact or engagement. This integration aims to leverage best practices from the Emerson Management System, driving productivity improvements and streamlining costs across various functions.

Product offerings and services have also seen enhancements. NI's software-connected automated test and measurement systems are now part of Emerson's portfolio, providing a more comprehensive and innovative solution to customers. This expansion is expected to accelerate revenue growth and increase Emerson's exposure to high-growth markets such as semiconductor, electronics, transportation, and aerospace. While specific employee reactions are not detailed, the shared vision and culture between the two companies are expected to foster a positive environment. Customers have been reassured of continued support and collaboration, with a focus on maintaining continuity and delivering innovative solutions.

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