National Instruments Co-Founder Backs Emerson's $7 Billion Offer

Emerson Electric Co.'s $7 billion takeover offer for National Instruments Corp. has won the support of the company's co-founder.

This is a significant development in the acquisition process, and it is likely to help Emerson Electric move forward with the deal.

James Truchard, the founder of NI, said that he believes the company should accept Emerson's $53-per-share cash offer. He believes that this is the best outcome for all stakeholders involved.

Truchard stated in an interview that the offer was a significant premium to where NI was trading. He then went on to say that it is all cash and that it's not clear if there are other buyers who would be able to pay cash.

Neither Emerson nor NI would comment when asked for a statement.

Public encouragement from NI's founder to follow a path it has thus far resisted is just the latest twist in a back-and-forth takeover battle. Emerson this month said it had made more than one offer to buy NI since May, but that the target had refused to engage. NI said in its own statement that it wanted to talk to other potential parties before making a decision.

Emerson’s offer, which values NI at $7.6 billion, including debt, represents a 32% premium to NI’s closing share price the day before the target announced a strategic review on Jan. 13. NI rose 0.1% to $54.19 at 9:51 a.m. in New York trading Wednesday, giving the company a market value of about $7.1 billion. Emerson’s offer is thus a significant premium to the current market value of NI.

Truchard, who still has a large number of shares in NI, said he’s been talking to other ex-employees who also have a stake in the company and that “a lot of them would be happy to get paid out in cash right now.”

Truchard mentioned that St. Louis-based Emerson looked like a good match for NI and that other possible buyers may have to deal with antitrust issues.

"It seems Emerson has a clear definition of their goal in terms of setting up an automation-based business - something we were pioneers in. All signs point to a good culture that can continue to help NI grow," he said.

Truchard was known for being hands-on and accessible, eschewing executive trappings such as his own office, and driving to work in a road-worn pickup truck that didn’t have its own parking space. He was at the helm of NI from its founding until 2017 and developed a reputation for being down-to-earth and approachable.

Truchard believes that rivals have gained ground on the company because they have not been investing enough in new technologies and have not been executing well.

He said that in the early 1990s, he started talking about stakeholders which include employees, shareholders, partners, and customers. He talked about these groups before it was popular to do so. Nowadays, it seems like there is less of an emphasis on that within the company.