Emerson 2009 Annual Report Download - page 33

Annual Report 31
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The Company acquired Roxar ASA during the third quarter of 2009, Trident Powercraft Private Limited during the
second quarter of 2009 and System Plast S.p.A. during the rst quarter of 2009. Roxar is a leading global supplier of
measurement solutions and software for reservoir production optimization, enhanced oil and gas recovery and ow
assurance and is included in the Process Management segment. Trident Power is a manufacturer and supplier of power
generating alternators and other products and is included in the Industrial Automation segment. System Plast is a
manufacturer of engineered modular belts and custom conveyer components for the food processing and packaging
industries and is included in the Industrial Automation segment. In addition to Roxar, Trident Power and System Plast,
the Company acquired other smaller businesses during 2009, mainly in the Climate Technologies, Appliance and Tools
and Process Management segments. Total cash paid for all businesses was approximately $776 (net of cash acquired
of approximately $31 and debt assumed of approximately $230) and their annualized sales were approximately
$530. Goodwill of $541 ($34 of which is expected to be deductible for tax purposes) and identiable intangible assets
(primarily customer relationships and patents and technology) of $365, which have a weighted-average life of 12 years,
were recognized from these transactions in 2009. Because valuations of acquired assets and liabilities are in-process,
purchase price allocations for scal year 2009 acquisitions are subject to renement.
During the rst quarter of scal 2010, the Company entered into a denitive agreement and commenced a tender
offer to acquire Avocent Corporation for approximately $1.2 billion in cash. Avocent is a leader in delivering informa-
tion technology operations management solutions that reduce operating costs, simplify management and increase
availability of critical information technology environments via integrated, centralized software. Avocent products
complement the Network Power segment’s power systems, energy management and precision cooling solutions.
The transaction is expected to be completed in December 2009 and is subject to acceptance of the tender offer by a
majority of Avocent shareholders, customary closing conditions and regulatory approvals.
The Company acquired Motorola Inc.’s Embedded Computing business during the rst quarter of 2008. Embedded
Computing provides communication platforms and enabling software used by manufacturers of equipment for
telecommunications, medical imaging, defense and aerospace, and industrial automation markets and is included in
the Network Power segment. In addition to Embedded Computing, the Company acquired several smaller businesses
during 2008, mainly in the Process Management and Network Power segments. Total cash paid for these businesses
was approximately $561 (net of cash acquired of approximately $2) and their annualized sales were approximately
$665. Goodwill of $273 ($214 of which is expected to be deductible for tax purposes) and identiable intangible assets
(primarily technology and customer relationships) of $191, which have a weighted-average life of eight years, were
recognized from these transactions.
In the rst quarter of 2008, the Company divested the Brooks Instrument ow meters and ow controls unit, which had
sales for the rst quarter of 2008 of $21 and net earnings of $1. Proceeds from the sale of Brooks were $100, resulting
in a pretax gain of $63 ($42 after-tax). The net gain on divestiture and Brooks’ results of operations for scal 2008 are
classied as discontinued operations; prior year results of operations were inconsequential. This business was previ-
ously included in the Process Management segment. Also in scal 2008, the Company received approximately $101
from the divestiture of the European appliance motor and pump business, resulting in a loss of $92, which included
goodwill impairment of $83 and an additional loss of $9. The European appliance motor and pump business had
total annual sales of $453 and $441 and net earnings, excluding the divestiture loss, of $7 and $7 in 2008 and 2007,
respectively. The divestiture loss and results of operations are classied as discontinued operations. This business was
previously included in the Appliance and Tools segment.
In scal 2007, the Company acquired Damcos Holding AS during the second quarter and Stratos International, Inc.
during the fourth quarter. Damcos supplies valve remote control systems and tank monitoring equipment to the
marine and shipbuilding industries and is included in the Process Management segment. Stratos is a designer and
manufacturer of radio-frequency and microwave interconnect products and is included in the Network Power segment.
In addition to Damcos and Stratos, the Company acquired several smaller businesses during 2007, mainly in the
Process Management and Appliance and Tools segments. Total cash paid for these businesses was approximately $295
(net of cash acquired of approximately $40 and debt assumed of approximately $56) and their annualized sales were
$240. Goodwill of $189 (none of which is expected to be deductible for tax purposes) and identiable intangible assets
(primarily technology and customer relationships) of $106, which have a weighted-average life of nine years, were
recognized from these transactions.
The results of operations of the businesses discussed above have been included in the Company’s consolidated results
of operations since the respective dates of acquisition or until the respective dates of divestiture.