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ACQUISITIONS AND DIVESTITURES | 9 Months Ended
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Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES National Instruments On October 11, 2023, the Company completed the acquisition of National Instruments Corporation (“NI”). NI, which provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost, had revenues of approximately $1.7 billion and pretax earnings of approximately $170 for the 12 months ended September 30, 2023. NI is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group, see Note 14. The following table summarizes the components of the purchase consideration reflected in the acquisition accounting for NI.
Cash paid to acquire remaining NI shares not already owned by Emerson |  | $ | 7,833 |
Payoff of NI debt at closing |  | 634 |
Total consideration paid in cash at closing |  | 8,467 |
Fair value of NI shares already owned by Emerson prior to acquisition |  | 137 |
Value of stock-based compensation awards attributable to pre-combination service |  | 49 |
Total purchase consideration |  | $ | 8,653 |
The total purchase consideration for NI was allocated to assets and liabilities as follows. Valuations of acquired assets and liabilities are in-process and subject to refinement.
Cash and equivalents |  | $ | 135 |
Receivables |  | 310 |
Inventory |  | 496 |
Other current assets |  | 140 |
Property, plant and equipment |  | 329 |
Goodwill ($121 expected to be tax-deductible) |  | 3,434 |
Other intangible assets |  | 5,275 |
Other assets |  | 113 |
Total assets |  | 10,232 |
Accounts payable |  | 52 |
Accrued expenses |  | 328 |
Deferred taxes and other liabilities |  | 1,199 |
Total purchase consideration |  | $ | 8,653 |
The estimated intangible assets attributable to the transaction are comprised of the following (in millions):
|  | Amount |  | Estimated Weighted Average Life (Years)
Developed technology |  | $ | 1,570 |  |  | 9
Customer relationships |  | 3,360 |  |  | 15
Trade names |  | 210 |  |  | 9
Backlog |  | 135 |  |  | 1
Total |  | $ | 5,275 |  |  |
Results of operations for the three and nine months ended June 30, 2024 attributable to the NI acquisition include sales of $355 and $1,104, respectively, and a net loss of $86 and $492, respectively. The net loss included the impact of inventory step-up amortization recorded in the first quarter, intangibles amortization, retention bonuses, stock compensation expense and restructuring. Pro Forma Financial Information The following unaudited proforma consolidated condensed financial results of operations are presented as if the acquisition of NI occurred on October 1, 2022. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition occurred as of that time ($ in millions, except per share amounts).
|  | Three Months Ended June 30, |  | Nine Months Ended June 30, |  |  |
|  | 2023 |  |  | 2024 |  |  | 2023 |  |  | 2024 |  |  |  |
Net Sales |  | $ | 4,363 |  |  | 4,380 |  |  | 12,377 |  |  | 12,892 |  |  |  |
Net earnings from continuing operations common stockholders |  | $ | 581 |  |  | 374 |  |  | 887 |  |  | 1,396 |  |  |  |
Diluted earnings per share from continuing operations |  | $ | 1.00 |  |  | 0.65 |  |  | 1.53 |  |  | 2.43 |  |  |  |
Pro forma Net sales for the three and nine months ended June 30, 2023 include $417 and $1,302, respectively, attributable to NI. The pro forma results for the three months ended June 30, 2023 include ongoing intangibles amortization of $105 and backlog amortization of $34, and exclude the mark-to-market gain of $12 recognized in the prior year on the Company's equity investment in National Instruments Corporation (see Note 7). The pro forma results for the nine months ended June 30, 2023 include transaction costs of $198 which were assumed to be incurred in the first quarter of fiscal 2023. These transaction costs include $88 incurred by NI prior to the completion of the transaction and $110 incurred by Emerson in periods subsequent to the first quarter of fiscal 2023. The pro forma results for the nine months ended June 30, 2023 also include $317 of ongoing intangibles amortization, backlog amortization of $102, inventory step-up amortization of $213, and retention bonuses of $51, and exclude the mark-to-market gain of $47 recognized in the prior year on the equity investment in National Instruments Corporation. Other Transactions In the second quarter of fiscal 2024, the Company received its final distribution of $79 related to its subordinated interest in Vertiv. In addition, the Company divested a small business in the Final Control segment and recognized a non-cash loss of $39. In the fourth quarter of fiscal 2023, the Company acquired two businesses, Flexim, which is reported in the Measurement & Analytical segment, and Afag, which is reported in the Discrete Automation segment, for $715, net of cash acquired. The Company recognized goodwill of $424 (none of which is expected to be tax deductible) and other identifiable intangible assets of $323, primarily customer relationships and intellectual property with a weighted-average useful life of approximately 9 years. On March 31, 2023, Emerson completed the divestiture of Metran, its Russia-based manufacturing subsidiary. In the first quarter of fiscal 2023, the Company recognized a pretax loss of $47 in Other deductions ($47 after-tax, in total $0.08 per share) related to its exit of business operations in Russia.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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