Emerson Spinoff Without An Activist


As we noted in early June, Emerson could be one of Nelson Peltz’s latest targets [notes from then] in the industrial space. Turns out, Emerson is becoming it’s own activist and Peltz is actually targeting Pentair [more on Peltz-Pentair].

In any case, back when we profiled Emerson, we noted, “The big opportunity for Peltz at Emerson is to separate out its network power business, which has been struggling due to its energy market exposure. Ultimately leaving its businesses that create remote monitoring, sensors, etc.”

That’s just what Emerson is doing; this morning it announced that it would do a tax-free spin of its Network Power business. It also plans to explore strategic alternatives for its motors and drives, power generation and remaining storage businesses.

This Odey Cub Is Waiting For A Pullback To Buy Financials

Crispin OdeyMichele Ragazzi's Giano Capital returned 1.9% for March, taking the fund's year-to-date performance to 1.7%. Since its inception, Ragazzi's flagship fund has produced a compound annual return of 7.8%. According to a copy of the €10 million fund's March update, a copy of which ValueWalk has been able to review, Giano's most significant investment at Read More

This new publicly traded company featuring the Network Power business will be the world’s leading, stand-alone provider of thermal management, A/C and D/C power, transfer switches, services and infrastructure management systems for the data center and telecommunications industries.

The idea is to create “…two, independent companies will position both businesses to continue as leaders and to pursue distinct strategies to drive profitable growth. Emerson and Network Power will each have sharper strategic focus, enabling both companies to better allocate resources, incentivize employees and allocate capital to capture the significant long-term opportunities in their respective markets.”

The deal is expected to be done by September 30, 2016.

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