It didn’t take long for Emerson (EMR) to deliver on management’s pledge to add more software assets to the portfolio. While Emerson had been rumored to be in the bidding for OSIsoft, which is being acquired by Schneider’s (OTCPK:SBGSY) AVEVA (OTCPK:AVVYY), they ended buying a different OSI – announcing a $1.6 billion deal for utility automation software company Open Systems International (or “OSI”).
The multiple that Emerson is paying does give some reason for pause, but this is basically the going price for this kind of asset now, and I’m sure OSI wouldn’t have had much difficulty finding another willing buyer. In any case, I like the deal for Emerson, as it broadens the company’s exposure to utilities, adding transmission and distribution (or T&D) to its existing power gen offerings, and gives the company greater leverage to growth in grid automation. This deal doesn’t really change my views on Emerson shares; Emerson is valued like the high-quality industrial that it is.
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Emerson Shows It's Serious About Adding To Its Software Capabilities
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