Emerson Electric said on Tuesday that it has sold its Emerson Network Power business, which includes the Liebert line of data centre power hardware and software, to a private equity company.
Under the terms of the deal, Platinum Equity and a group of co-investors will pay Emerson Electric US$4 billion to acquire Emerson Network Power. According to an Emerson Electric Securities and Exchange Commission filing, the deal is expected to close by 31 December.
The sale was not unexpected. Emerson Electric said on 30 June 2015 that it planned to spin off its Emerson Network Power business as part of a move to streamline its portfolio while driving growth and creating shareholder value.
Emerson Network Power provides thermal management, AC and DC power hardware and software, transfer switches, services, and information management systems for data centre and telecommunications customers, including solutions sold through the channel under the Liebert brand. The business generated about US$4.4 billion in revenue in fiscal 2015, Emerson Electric said.
For the most recent fiscal quarter, which ended 30 June, Emerson Network Power generated US$1.03 billion in revenue, down from the US$1.11 billion it generated during the same quarter of last year. Emerson Network Power earnings reached US$37 million in the most recent fiscal quarter, down year over year from US$101 million.
Scott Barbour, executive vice president of Emerson Electric and business leader for Emerson Network Power, will be in charge of Emerson Network Power after the sale, although the company did not specify his exact title.
Emerson Electric did not reply to a request for more information before this report was published.
Barbour, in a prepared statement, said, "We firmly believe Platinum Equity is an ideal partner as we continue to drive efficiency in our operations and invest to bring innovative products and services to our customers. The work we’ve done at Network Power in recent years ensures we are well prepared for an ownership transition and have the right foundation in place to be successful."