Item 1.01 Entry into a Material Definitive Agreement.
On
As a result of the Transactions, Emerson and Emerson Sub will collectively own
55% of the outstanding shares of Newco Stock (calculated on a fully diluted
basis) as of the Closing, and pre-Merger Aspen stockholders will own the
remaining outstanding shares of Newco Stock. Following the Closing, Newco and
its subsidiaries will operate under the name "
The obligation of the parties to consummate the Closing is subject to customary
conditions, including, among other things, the (i) affirmative vote of the
holders of a majority of the outstanding shares of
The Transaction Agreement contains certain termination rights for each of
Emerson and Aspen, including the right of each party to terminate the
Transaction Agreement if the Transactions have not been consummated by
The Transaction Agreement contains customary representations and warranties by each party. The parties have also agreed to various customary covenants and agreements, including, among others, to conduct, subject to certain exceptions, their business (or in the case of Emerson and its subsidiaries, the industrial software businesses contributed to Newco) in the ordinary course consistent with past practice during the period between the execution of the Transaction Agreement and the Closing. The Transaction Agreement also prohibits Aspen's solicitation of proposals relating to alternative transactions and restricts Aspen's ability to furnish information to, or participate in any discussions or negotiations with, any third party with respect to any such transaction, subject to limited exceptions.
At the Closing, (i) Newco, Emerson and Emerson Sub will enter into a
stockholders agreement (the "Stockholders Agreement"), (ii) Newco and Emerson
Sub will enter into a registration rights agreement, and (iii) Newco and Emerson
will enter into a tax matters agreement and a transition services agreement. The
forms of these agreements, as well as forms of the organizational documents of
Newco and the
The Stockholders Agreement will provide, among other things, that:
· Board Representation. Immediately following the Closing, the Newco board of
directors will consist of nine directors, consisting of (i) five directors designated by Emerson Sub, one of whom will beJill D. Smith , the current chair of the Aspen board of directors and who will also be the chair of the Newco board of directors, and three of whom will be designated by Emerson Sub following consultation withMs. Smith , (ii) three directors designated by Aspen and (iii) the Chief Executive Officer of Aspen immediately prior to the Closing. Following the Closing, Emerson Sub will have the right to designate a number of directors to the Newco board of directors that is proportionate to its ownership of outstanding shares of Newco Stock at such time; provided that Emerson Sub will have the right to designate at least a majority of such directors for so long as Emerson beneficially owns more than 40% of the outstanding shares of Newco Stock and further provided that if Emerson beneficially owns less than 20% (but at least 10%) of the outstanding shares of Newco Stock, Emerson Sub will have the right to designate one director. The members of the Newco board of directors not designated by Emerson Sub will be designated by theNominating & Governance Committee of the Newco board of directors. For so long as Emerson beneficially owns more than 50% of the outstanding shares of Newco Stock, at Emerson Sub's election, Newco will avail itself of "controlled company" exemptions (in whole or in part) to the listing rules of NASDAQ, and accordingly it could be exempt from some of the exchange's generally applicable listing requirements.
· Consent Rights. Emerson Sub will have the right to consent to certain material
actions of Newco and its subsidiaries for so long as it maintains certain ownership percentages, including over certain mergers and acquisitions, sales of assets, incurrence of indebtedness, issuances of securities and the appointment and removal of the Chief Executive Officer of Newco. In most instances, these consent rights terminate when Emerson ceases to beneficially own more than 40% of the outstanding shares of Newco Stock.
· Standstill Provisions. For a period of two years beginning on the Closing Date,
Emerson and its subsidiaries will be subject to a customary standstill, with certain customary exceptions, including to permit Emerson to acquire shares of Newco Stock constituting in the aggregate no more than 5% of the aggregate shares of Newco Stock outstanding as of the Closing Date and pursuant to the Pre-Agreed Procedures (as described below).
· Transfer Restrictions. For a period of two years beginning on the Closing Date
(or until such time that Emerson beneficially owns less than 20% of the outstanding shares of Newco Stock), Emerson and its subsidiaries may not transfer any shares of Newco Stock unless approved by an ad-hoc committee of the Newco board of directors consisting solely of independent directors (an "RPT Committee").
· Preemptive Rights and Percentage Maintenance Rights. Emerson will have certain
rights to buy its pro rata share of securities issued by Newco and to acquire additional securities of Newco to maintain its then ownership percentages in the event of additional issuances of Newco securities.
· Pre-Agreed Procedures. Emerson will have the right to purchase additional
equity securities of Newco under certain circumstances pursuant to certain
pre-agreed prices and procedures as set forth in the Stockholders Agreement,
without the need for the approval of an RPT Committee. These procedures include
Emerson's ability to provide Newco with financing in connection with any
proposed acquisition transaction, and the pre-agreed pricing of such financing,
if such financing is approved by an RPT Committee. . . .
Item 2.02 Results of Operations and Financial Conditions.
In connection with the announcement of the Transactions, Emerson reaffirmed previously announced fiscal year 2021 underlying sales guidance and adjusted EPS guidance.
The following tables summarize the reaffirmed guidance and reconcile these
non-GAAP financial measures to the most directly comparable
Reconciliations of Non-GAAP Financial Measures - Emerson:
Underlying Sales Change:
FY 2021 Reported (GAAP) 9% - 10% (Favorable) / Unfavorable FX (3)% Acquisitions / Divestitures (1)% Underlying (non-GAAP) 5% - 6%
Adjusted Earnings Per Share:
FY 2021 Reported (GAAP)$3.78 -$3.80 Restructuring .24 OSI purchase accounting items and fees .07 Equity investment gain (.03) Adjusted Earnings Per Share$4.06 -$4.08
These are Emerson's preliminary estimates based on currently available
information, and are subject to change as Emerson completes its financial close
process. They also do not present all necessary information for an understanding
of Emerson's financial condition as of
The information in this Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. Exhibit Number Description of Exhibits Transaction Agreement and Plan of Merger, dated as ofOctober 10 , 2.1 2012, amongEmerson Electric Co. , Aspen Technology, Inc., EMRWorldwide Inc. ,Emersub CX, Inc. , andEmersub CXI, Inc. * ** 104 Cover Page Interactive Data File (formatted as Inline XBRL)
* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. Emerson agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the
** Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).
Additional Information and Where to Find It
In connection with the proposed transaction between Emerson and Aspen, Newco
will prepare and file with the
Emerson Aspen
Bedford, MA 01730 Media Relations: Media Relations: EmersonPR@fleishman.comAndrew Cole /Chris Kittredge / Frances www.emerson.com/en-us/investors Jeter Investor Relations:Sard Verbinnen & Co. Colleen Mettler , Vice President, AspenTech-SVC@sardverb.com Investor Relations: http://ir.aspentech.com/ (314) 553-1705 Investor Relations: investor.relations@emerson.comBrian Denyeau ICR Brian.Denyeau@icrinc.com No Offer or Solicitation
This report is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, the solicitation of an offer to subscribe for, buy or sell or an invitation to subscribe for, buy or sell any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act and otherwise in accordance with applicable law.
Participants in the Solicitation
Emerson, Aspen, Newco and certain of their respective directors and executive
officers and other members of their respective management and employees may be
deemed to be participants in the solicitation of proxies in connection with the
proposed transaction. Information regarding the persons who may, under the rules
of the
Caution Concerning Forward-Looking Statements
This communication contains "forward-looking" statements as that term is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act, as amended by the Private Securities Litigation Reform Act of 1995. All statements, other than historical facts, are forward-looking statements, including: statements regarding the expected timing and structure of the proposed transaction; the ability of the parties to complete the proposed transaction considering the various closing conditions; the expected benefits of the proposed transaction, such as improved operations, enhanced revenues and cash flow, synergies, growth potential, market profile, business plans, expanded portfolio and financial strength; the competitive ability and position of Newco following completion of the proposed transaction; legal, economic and regulatory conditions; and any assumptions underlying any of the foregoing. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "plan," "could," "would," "project," "predict," "continue," "target" or other similar words or expressions or negatives of these words, but not all forward-looking statements include such identifying words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. We can give no assurance that such plans, estimates or expectations will be achieved and therefore, actual results may differ materially from any plans, estimates or expectations in such forward-looking statements.
Important factors that could cause actual results to differ materially from such
plans, estimates or expectations include, among others: (1) that one or more
closing conditions to the transaction, including certain regulatory approvals,
may not be satisfied or waived, on a timely basis or otherwise, including that a
governmental entity may prohibit, delay or refuse to grant approval for the
consummation of the proposed transaction, may require conditions, limitations or
restrictions in connection with such approvals or that the required approval by
the stockholders of Aspen may not be obtained; (2) the risk that the proposed
transaction may not be completed in the time frame expected by Emerson, Aspen or
Newco, or at all; (3) unexpected costs, charges or expenses resulting from the
proposed transaction; (4) uncertainty of the expected financial performance of
Newco following completion of the proposed transaction; (5) failure to realize
the anticipated benefits of the proposed transaction, including as a result of
delay in completing the proposed transaction or integrating the industrial
software business of Emerson with the business of Aspen; (6) the ability of
Newco to implement its business strategy; (7) difficulties and delays in
achieving revenue and cost synergies of Newco; (8) inability to retain and hire
key personnel; (9) the occurrence of any event that could give rise to
termination of the proposed transaction; (10) potential litigation in connection
with the proposed transaction or other settlements or investigations that may
affect the timing or occurrence of the contemplated transaction or result in
significant costs of defense, indemnification and liability; (11) evolving
legal, regulatory and tax regimes; (12) changes in economic, financial,
political and regulatory conditions, in
(including the COVID-19 pandemic) and epidemics and any related company or
governmental policies and actions to protect the health and safety of
individuals or governmental policies or actions to maintain the functioning of
national or global economies and markets, including any quarantine, "shelter in
place," "stay at home," workforce reduction, social distancing, shut down or
similar actions and policies; (15) actions by third parties, including
government agencies; (16) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the transaction;
(17) the risk that disruptions from the proposed transaction will harm Emerson's
and Aspen's business, including current plans and operations; (18) certain
restrictions during the pendency of the acquisition that may impact Emerson's or
Aspen's ability to pursue certain business opportunities or strategic
transactions; (19) Emerson's, Aspen's and Newco's ability to meet expectations
regarding the accounting and tax treatments of the proposed transaction; and
(20) other risk factors as detailed from time to time in Emerson's and Aspen's
reports filed with the
Any forward-looking statements speak only as of the date of this communication. Neither Emerson, Aspen nor Newco undertakes any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
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