MIT-spinout Aspen Technologies is merging with Emerson Electric Co., a Missouri software and technology company, in a deal valued at $11 billion.
The companies announced Monday that Emerson plans to merge its industrial software businesses into the Bedford-based company. The deal, first reported last week by Bloomberg, will combine Emerson's Geological Simulation Software business and its OSI Inc. unit with Bedford, Massachusetts-based AspenTech, which will continue to be led by CEO and President Antonio Petri.
AspenTech, which had 500 employees in its Massachusetts headquarters last year, is a maker of software for process manufacturing for energy, chemicals, pharmaceuticals, engineering and construction industries. In 2014, the company moved its headquarters to a 140,000-square-feet location in Bedford.
AspenTech has a market capitalization of about $9.5 billion, while industrial conglomerate Emerson is valued at about $55 billion, according to Yahoo Finance.
Emerson, which reported fiscal 2020 sales of $16.8 billion, is putting its software businesses in the hands of a much smaller company, but one it believes will be better equipped to maximize its growth potential while positioning it to be attractive to highly sought technology talent.
On its own, AspenTech produced $790.4 million in revenue in fiscal 2021, up 18.4% from a year earlier, and employed 1,897 people altogether. After the deal, Emerson said the new AspenTech is expected to produce fiscal 2022 revenue of $1.1 billion, adjusted earnings of $90 million, and employ 3,700.
“This transaction enables us to advance our position as a premier, highly diversified industrial software leader poised for significant growth, strong financial performance and a vehicle to drive future software acquisitions, while providing immediate cash value to AspenTech shareholders,” said Pietri, president and CEO of AspenTech. “The new AspenTech will benefit from a larger and more diversified market, which we will be able to serve with a comprehensive software portfolio, an expanded global sales channel and an even stronger balance sheet reinforced by Emerson."
Boston Business Journal reporter Lucia Maffei contributed to the reporting of this article.
