$40 Billion Of M&A In 4 Years But More ‘May' Follow, Says Emerson COO
(AP Photo: Tom Gannam)
Despite having made $40 billion worth of acquisitions over the last four years, global industrial automation and technology giant Emerson (NYSE: EMR) may not be quite done yet, according to the company's chief operating officer Ram Krishnan.
Some of the company's recent big ticket buys include automated test equipment and virtual instrumentation software company National Instruments for $8.2 billion, in 2023, and industrial software leader AspenTech with the deal valued at $7.2 billion, earlier this year.
In an exclusive interview on Thursday, on the sidelines of Emerson Exchange, the company's annual leadership event in San Antonio, Texas, U.S., Krishnan said building further operating strength focused on Emerson's core competencies - i.e., process hybrid industries around production automation, and test and measurements - would remain a key driver.
"It's not about elevated levels of M&A spending by us but the quest for the right kind of asset. Our acquisition strategy will be centered on both our core domains and what high quality assets we can bring in to the Emerson family.
"On the production automation side, certainly we've got already have a very comprehensive scope in terms of pressure, temperature, level flow instrumentation, analyzers, control valve, pressure relief valves, isolation valves - you name it. So, I don't see a lot of opportunity for us or the need to build out that capability.
'Certainly there are elements in the research and development side in the automated test sphere where we may consider acquisitions. However, bulk of our moves would all likely be around optimization and software that would augment our vision of the enterprise operations platform and further our core ambition of boundless automation. Anyone who knows us, knows that's a clear area of focus for us,' Krishnan said.
With the big two industrial software vendors in the space - AVEVA and AspenTech - already having been acquired by Schneider Electric and Emerson respectively, the market's focus is turning to another leading industrial software firm Cognite.
Ram Krishnan, chief operating officer of Emerson speaks at Emerson Exchange 2025 in San Antonio, ... More Texas, U.S.
Krishnan declined comment on whether Emerson would be interested in Cognite. 'We have certain targets in mind and I would not like to go into specifics. Doubtless, our competitors have their own wish lists.'
Unsurprisingly, as the industrial software and automation market heats up, Emerson may be leading the pack on valuation, but the likes of ABB, Honeywell, Siemens, Schneider and Yokogawa have not held back in recent years either.
Krishnan noted: "Given that context, our move for AspenTech should not come as a surprise. Software and industrial optimization is a domain that industrials cannot ignore because ultimately in any technology stack – you've got to have hardware and software.
'But the vision for most would be software defined hardware advantaged. You've got to have the best-in-class software to generate the data, and perform the measurement or actuation function.'
Krishnan said the value for customers unlocking higher productivity, reliability, safety and sustainability would come through software, artificial intelligence, the industrial internet of things, and the 'ability to covert data into actionable insights.'
Emerson's ultimate objective, Krishnan added, is to help its customers and the wider industrial and manufacturing complex move operations from what is today 'a digitally connected plant to one that is self optimizing" and autonomous.
To that end, Emerson launched its enterprise operations platform named 'Project Beyond' on Monday, which is being tipped as the "industry's first software-defined, operational technology-ready digital platform' that will deploy and manage its suite of new artificial intelligence applications and models.
'Project Beyond is the latest in a line offerings from us promising customers software defined, enterprise level execution on the road towards autonomy, which I believe will unlock a lot of value for our customers,' the Emerson COO concluded.
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