NEW YORK (Reuters) - Industrial conglomerate Emerson Electric Co agreed to acquire network equipment technology provider Avocent Corp for about $1.2 billion in cash in a deal that will expand Emerson's business that assures the stability of large computer systems.
Emerson said it will pay $25 for each share of Avocent, a premium of 22 percent to the stock's Monday closing price of$20.52.
Shares of Emerson were up 9 cents at $38.77, while Avocent jumped $4.28 to $24.76 in premarket trading.
Huntsville, Alabama-based Avocent's board unanimously endorsed the terms of the deal, which is expected to close early in the new year, the companies said.
The deal will increase Emerson's $2.6 billion network power business, which makes systems to manage the temperature and energy use of large computer networks used by telecommunications, healthcare and industrial companies.
Avocent, whose customers include Yahoo
The deal was also another sign that dealmaking in the industrial and technology sectors was reviving after a prolonged slump. Last month, private equity firm American Securities said it would pay $411 million for engine component maker GenTek
Smaller deals were announced by SPX Corp
Credit Suisse analysts, in a recent research note, said industrial companies were likely to do smaller, bolt-on acquisitions but would probably steer clear of large deals to conserve cash until clearer signs of an economic recovery emerged.
The analysts named Illinois Tool Works
(Reporting by Nick Zieminski and Bhaswati Mukhopadhyay; Editing by Deepak Kannan, Dave Zimmerman)
