Emerson Electric Co. expects its purchase of information-technology infrastructure provider Avocent Inc. will make the company's data-center products more attractive to customers.
Emerson, a diversified manufacturer of industrial automation technologies and IT-related solutions, said on Oct. 6 it reached an agreement to purchase Avocent for $1.2 billion. Emerson said the deal will create significant opportunities for growth by blending hardware, software and embedded technologies in a unified platform that simplifies monitoring, managing and problem solving in any size data center.
"Combining Avocent's technologies, relationships and installed base with Emerson's power and cooling presence allows us to offer a more compelling solution to our data center customers' most pressing challenge -- energy efficiency," said David Farr, Emerson president and CEO, in an Oct. 6 statement. "It furthers our customers' ability to better manage reliability, availability and lifecycle costs through a simple yet comprehensive view of the corporate data center physical infrastructure."
Emerson's data center-related revenues were approximately $2.6 billion in 2008.
Huntsville, Ala.-based Avocent's sales reached $657 million in 2008. The company operates global manufacturing, research and development and sales operations globally, with 50% of 2008 revenues coming from outside the United States.
At A Glance
Emerson Electric Co.
St. Louis, Mo.
Primary Industry: Electrical Equipment & Appliances
Number of Employees: 140,700
2008 In Review
Revenue: $24.8 billion
Profit Margin: 9.72%
Sales Turnover: 1.20
Inventory Turnover: 6.85
Revenue Growth: 9.90%
Return On Assets: 12.26%
Return On Equity: 27.50%
On Oct. 26 the Federal Trade Commission said U.S. antitrust regulators approved Emerson's purchase of Avocent, Reuters news service reported.
Farr expects Avocent to add about $400 million to Emerson's 2010 revenue, Dow Jones Newswires reported. In August, Emerson reported third-quarter net earnings fell to $387 million, or 51 cents per share, from $612 million, or 78 cents per share, a year earlier.
Emerson will report its fourth-quarter results prior to market opening on Nov. 3.
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