The Rockwell Automation Bidding Starts at $27 Billion

Brooke Sullivan for Bloomberg:  Rockwell Automation Inc., the subject of perennial takeover speculation, now has a real, live suitor. Expect more to emerge.

The $26 billion maker of factory software and controls confirmed on Tuesday that Emerson Electric Co. had offered to acquire it for $215 a share, with the bid composed of 50 percent cash and the rest in stock. The price works out to about 22 times Rockwell Automation's trailing 12-month Ebitda, or about double the median multiple for big industrial takeovers over the last decade. The $27 billion proposal -- like the several before that Emerson has reportedly made -- was resoundingly rejected.

That's One Expensive Target
Rockwell Automation's high valuation has been the biggest deterrent to a takeover. Its strategic value has never been in question.
That kind of response isn't surprising. This is Rockwell Automation we're talking about -- it's among the few remaining big industrial companies with one general expertise. Most of the others have been acquired over the years and embedded into one conglomerate or another. That includes its sister company, Rockwell Collins Inc., which agreed to sell itself this year to United Technologies Corp. As a direct beneficiary of the push to make factories and equipment run more efficiently, Rockwell Automation has only gotten more attractive for industrial buyers trying to adapt their businesses to the digital world . Given all that, it can honestly name its price.  Full Article:

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