ST. LOUIS--(BUSINESS WIRE)--Emerson (NYSE: EMR) today announced it has signed an agreement to purchase the Tools and Test Equipment (Tools & Test) business of Textron (NYSE: TXT) for $810 million. Tools & Test is a leading manufacturer of electrical and utility tools, diagnostics, and test and measurement instruments with strong global distribution and highly respected brands, including Greenlee and Klauke. The acquisition, joined with Emerson’s Ridge Tool Company, creates a global $1 billion professional tools business with the broadest offering for mechanical, electrical and plumbing contractors. Emerson expects the acquisition to be accretive to earnings in fiscal 2019 and immediately accretive to cash flow.
“This acquisition significantly contributes to Emerson’s investment strategy of adding complementary businesses that broaden our served markets and add key capabilities to meet the evolving needs of our customers and drive premium growth,” said Emerson Chairman and Chief Executive Officer David N. Farr. “The strong strategic fit with Ridge Tool provides a meaningful value creation opportunity for Emerson.”
Tools & Test’s longtime leadership in electrical joining paired with the RIDGID portfolio of joining technologies for mechanical and plumbing applications creates a leading position in a fast-growing segment, critical for meeting the safety and efficiency needs of the professional trades. In addition, Tools & Test brings offerings in diagnostics and other digital technologies that are an excellent fit with RIDGID. From a geographic perspective, Tools & Test’s strong presence in European markets complements the market strength of RIDGID outside of Europe, and furthers the company’s mission to be the global tool of choice for the professional contractor.
“The Tools & Test acquisition provides Emerson an outstanding opportunity to better serve our target customer – the pro,” said Robert T. Sharp, Executive President, Emerson Commercial & Residential Solutions. “The addition of Greenlee and Klauke complements our iconic RIDGID brand, creates a leading technology portfolio, expands our geographic presence and strengthens our position in the growing global professional tools marketplace. I look forward to personally welcoming the Tools & Test employees into Emerson.”
Headquartered in Rockford, Ill., Tools & Test has 2,300 employees with 11 manufacturing locations around the world and 2017 sales of $470 million.
The acquisition is expected to close within the next 90 days, subject to various regulatory approvals and other customary closing conditions.
NOTE: A short slide presentation with additional information is available here.
Investor Conference Call
Please join us for a brief investor conference call to review the acquisition today at 9:00 a.m. ET, hosted by Robert Sharp and Mark Bulanda, Senior Vice President of Planning and Development. Access to the live webcast of the discussion will be available at http://www.emerson.com/financial at the time of the call. A replay of the conference call will remain available for approximately three months.
Emerson (NYSE: EMR), headquartered in St. Louis, Missouri (USA), is a global technology and engineering company providing innovative solutions for customers in industrial, commercial, and residential markets. Our Emerson Automation Solutions business helps process, hybrid, and discrete manufacturers maximize production, protect personnel and the environment while optimizing their energy and operating costs. Our Emerson Commercial & Residential Solutions business helps ensure human comfort and health, protect food quality and safety, advance energy efficiency, and create sustainable infrastructure. For more information visit Emerson.com.
Forward-Looking and Cautionary Statements
Statements in this press release that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include economic and currency conditions, market demand, pricing, protection of intellectual property, and competitive and technological factors, among others, as set forth in Emerson’s most recent Annual Report on Form 10-K and subsequent reports filed with the SEC.