MANHASSET, N.Y. St. Louis-based electronics company Emerson has agreed to acquire Artesyn Technologies Inc. in a cash transaction valued at $500 million, merging two of the top-tier global power supply companies.
Artesyn shareholders would receive roughly $11 per share under the proposed merger. Artesyn (Boca Raton, Fla.), had 2005 sales of $420 million. It supplies advanced power conversion equipment as well as hardware and software subsystems for a range of communication applications.
The company will become part of Emerson Network Power, one of the business groups of Emerson, a diversified electronics and technology company whose 2005 sales were $17.3 billion. Emerson Network Power accounted for $3.3 billion of Emerson’s 2005 sales.
Emerson Network Power is expected to expand its offerings in the enterprise computing, data, and telecommunications industries. The group’s diversified businesses include merchant AC/DC and DC/DC power supplier Astec Power and Liebert, a supplier of power protection equipment.
"Artesyn's focus on technology, global presence and complementary marquee customer relationships make it a great strategic fit with Emerson Network Power to help us better serve important customers in key markets around the world," said David N. Farr, Emerson chairman, chief executive officer and president, in a statement.
Both Artesyn and Emerson rank among the leading global power supply companies, according to Todd Cooper, an analyst with Stephens Inc. (Little Rock, Ark.). He was not surprised by the deal.
"The deal is fairly synergistic,” Cooper said. “Emerson picks up some products they did not have-- mostly dc/dc converters and ac/dc supplies for high-end servers and communications."
"There have been rumors for a long time," added Cooper, noting that other companies were seeking to buy Artesyn, including Taiwan-based Delta Electronics.
In September 2004, Artesyn rejected an unsolicited buyout bid from component supplier Bel Fuse Inc., terming the offer inadequate.
Like other power suppliers, Artesyn exhibited uneven results during 2005. Cooper believes the power supply industry faces a stronger 2006 as communications infrastructure and other markets improve.