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Emerson Electric to buy Avocent Corp. for $1.2 billion

By Amarendra Bhushan for CEOWORLD Magazine Updated:October 6, 2009

Emerson Electric Co. (NYSE: EMR) said Tuesday it’ll buy Avocent Corp. (NASDAQ: AVCT) in a deal valued at $1.3 billion.

The deal comes close on the heels of copier company Xerox Corp’s (XRX.N) offer to buy data center management firm Affiliated Computer Services Inc (ACS.N) for $6.4 billion.

Huntsville, Alabama-based Avocent, whose customers include Yahoo (YHOO.O) and Brocade Communications Systems (BRCD.O), recorded sales of $657 million in 2008.

The Avocent Board of Directors unanimously endorsed the terms of an all-cash tender offer of $25 per share, or approximately $1.2 billion. The purchase is expected to close around January 1, 2010, pending customary regulatory approvals and acceptance of the offer by Avocent stockholders holding a majority of Avocent shares.

Headquartered in Huntsville, Alabama, Avocent recorded sales in 2008 of $657 million. With global manufacturing, research and development and sales operations, nearly 50 percent of Avocent’s 2008 revenues came from outside the United States.

The agreement extends the integrated solutions Emerson provides to data center managers and creates significant opportunities for growth. Avocent blends hardware, software and embedded technologies in a unified platform that simplifies monitoring, managing and problem solving in any size data center.

Avocent’s IT infrastructure management technology is recognized as a leader in managing IT device operating and performance information. These configuration and monitoring technologies complement Emerson Network Power’s power systems, energy management and precision cooling solutions. Emerson’s data center-related revenues were approximately $2.6 billion in fiscal 2008.

“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 N. Farr, Emerson chairman, CEO and president. “It furthers our customers’ ability to better manage reliability, availability and lifecycle costs through a simple yet comprehensive view of the complete data center physical infrastructure.”

Mike Borman, Avocent’s CEO, added, “Augmenting Avocent’s ability to access and control the physical aspects of network devices and servers with information and knowledge of the broader power and cooling infrastructure forms a powerful combination missing today from the toolset available to data center managers.”

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