Emerson will pay $1.6 billion to acquire Open Systems International Inc., a Medina-based company that provides software for utility industries.
Emerson, a St. Louis-based global technology and engineering company, plans to operate OSI as a new stand-alone business that will collaborate with Emerson's existing Ovation platform.
As more renewable and variable power supplies are added to the grid, utility companies have a greater challenge to monitor and manage those supplies in more efficient and sustainable ways. OSI's enterprise automation software helps companies do that.
Emerson believes the addition of OSI will position Emerson as a leader in the ongoing digitization of the electric grid.
"An enormous change is underway as utilities globally are investing to digitize the grid and adapt to rapidly evolving energy sources and new technologies that increase consumer choices," said Lal Karsanbhai, executive president of Emerson's Automation Solutions business, in a news release.
"This acquisition will help the power industry maximize the remarkable opportunity to harness renewable energy sources and to accelerate the transformation to the smart power grid," he said.
OSI, which has about 1,000 employees globally and annual revenue of $167 million, provides software that helps digitize the energy grid, allowing utilities to monitor, optimize and control their real-time operations.
The solutions from OSI are also used in the automation of oil and gas operations, transportation and water industries, and its management software helps manage the generation, transmission and distribution of power supplies and monitors power outages.
Emerson's Ovation control software helps monitor power generation and combined with OSI's expertise Emerson believes it can give utility companies even more visibility into and control of their operations. It is a $1 billion portfolio of stand-alone software.
"This acquisition builds on Emerson's software footprint and supports customers in providing comprehensive end-to-end solutions to help the power industry continue transforming to meet the needs of tomorrow," Karsanbhai said.
Emerson has more than $18 billion in annual revenue and about 88,000 employees, including an automation solutions business run from the Twin Cities that employs 3,500.
The deal for OSI is one of 14 deals Emerson has done for its data management and services business and its largest deal since 2016 when it acquired the valves and controls business from Pentair, which is headquartered in London but managed out of Golden Valley.
In July, OSI announced that it had broken ground on a 75,000 square foot expansion project at its headquarters in Medina, an expansion that would make room for an additional 400 to 500 employees. The expansion would have an expanded training facility but also room for a secure subterranean Cloud data center that would serve its utility customers.
Shares of Emerson closed Thursday at $69.59, down 1%. Year-to-date its stock is down more than 8%.
Patrick Kennedy • 612-673-7926
