Business Context and Reporting Period
Company: Emerson Electric Co.
Filing Type: Form 8-K (Current Report)
Date of Report: November 30, 2016
Event: Completion of the sale of the Company's network power systems business.
Key Financial Metrics
- Transaction Value: $4 billion in cash, subject to post-closing adjustments.
- Retained Interest: The Company retained a subordinated interest in distributions, contingent upon equity holders first receiving a threshold return on their initial investment.
- Pro Forma Data: Unaudited pro forma consolidated balance sheet information as of September 30, 2016, is available in Exhibit 99.2. Pro forma earnings statements for 2014-2016 are not included as the business was reported as discontinued operations in the most recent 10-K.
- Other Metrics: The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity for the reporting period.
Material Changes
On November 30, 2016, Emerson Electric Co. completed the previously announced disposition of its network power systems business. The transaction was executed pursuant to an agreement dated July 29, 2016, with buyer parties controlled by affiliates of Platinum Equity Advisors, LLC. This marks a significant portfolio repositioning action for the Company.
Guidance, Outlook, and Risks
Management Commentary: The Company issued a press release on December 1, 2016, confirming the closure of the sale.
Risks and Uncertainties: Forward-looking statements in this report involve risks regarding the successful completion of strategic portfolio repositioning actions, economic and currency conditions, market demand, pricing, intellectual property protection, and competitive factors. The Company undertakes no obligation to update these statements.
Investor Verification Checklist
- Verify the final purchase price after post-closing adjustments.
- Review the terms of the retained subordinated interest and the threshold return required for equity holders.
- Examine the Unaudited Pro Forma Consolidated Financial Statements (Exhibit 99.2) to assess the balance sheet impact.
- Confirm the treatment of the network power systems business as discontinued operations in historical financial statements.