Emerson’s $810 Million Acquisition of Textron’s Tools and Test Equipment Business


Davis Polk is advising Emerson Electric Co. on its $810 million acquisition of the Tools and Test Equipment business of Textron.

Emerson (NYSE: EMR) 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.

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.

Headquartered in Rockford, Ill., Tools & Test has 2,300 employees with 11 manufacturing locations around the world and 2017 sales of $470 million.

The Davis Polk corporate team includes partner Phillip R. Mills (Picture) and associates Elyka A. Anvari and Samantha Kobbe. Partner Michael Mollerus and associate Anne E. McGinnis are providing tax advice. Partner Jeffrey P. Crandall is providing executive compensation advice. Partner Ronan P. Harty and counsel Mary K. Marks are providing antitrust and competition advice. Partner Pritesh P. Shah is providing intellectual property and technology advice. Counsel Betty Moy Huber is providing environmental advice.

Involved fees earner: Phillip R. Mills – Davis Polk & Wardwell; Elyka Anvari – Davis Polk & Wardwell; Samantha Kobbe – Davis Polk & Wardwell; Michael Mollerus – Davis Polk & Wardwell; Anne McGinnis – Davis Polk & Wardwell; Jeffrey Crandall – Davis Polk & Wardwell; Ronan Harty – Davis Polk & Wardwell; Mary Marks – Davis Polk & Wardwell; Pritesh P. Shah – Davis Polk & Wardwell; Betty Moy Huber – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: Emerson Electric Co.;

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Author: Ambrogio Visconti