Aspen Technology, Inc. AZPN concluded the merger with Emerson Electric Co. The merger involves the integration of Emerson's OSI Inc. and Geological Simulation Software (“GSS”) businesses with Aspen.
Emerson has given Aspen $6 billion in cash in exchange for a 55% ownership in the company, which will be distributed to Aspen stockholders. In addition, Emerson and Aspen strengthened their business relationship by enhancing a commercial partnership. The enhanced partnership will enable Aspen to expand its footprint in new and existing markets.
Aspen Technology, Inc. Price and Consensus
Aspen Technology, Inc. price-consensus-chart | Aspen Technology, Inc. Quote
OSI specializes in optimizing transmission and distribution networks for utility companies in the power industry. The integration of Emerson’s OSI business will aid Aspen to develop its transmission and distribution offering to support power grid modernization and ensure grid reliability. Aspen will now have the opportunity to cross-sell its current products to industrial customers due to increased exposure to the utilities and power market.
Emerson’s GSS business, which will be known as Subsurface Science and Engineering (“SSE”), provides a comprehensive solution for oil and gas supply-chain links. The solution is also extended to chemical supply-chain links, thereby providing total interlock from the reservoir to the gas station and into chemical production, per Aspen.
By moving OSI and the GSS business to a subscription-based business model, Aspen is expected to derive considerable revenue and synergy opportunities. Scale efficiencies — including shared research and development and selling, general and administrative groups, overhead, and spend optimization — are projected to result in cost savings.
Customers of OSI and GSS will benefit greatly from working with Aspen, particularly those in the early stages of digitalization. Aspen can assist them to navigate their journey by utilizing its experience in the oil and gas and chemical verticals.
Emerson’s grid modernization technology will enable Aspen to provide differentiated offerings in Industrial AI and asset optimization, along with advanced distribution management systems and geological simulation software. Aspen will be better positioned to help customers improve their safety, reliability and production while reducing emissions.
Other Key Picks
Aspen currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader technology space are InterDigital IDCC, Vishay Intertechnology VSH and Pure Storage PSTG. InterDigital and Pure Storage currently sport a Zacks Ranks #1 (Strong Buy), whereas Vishay Intertechnology carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $3.28 per share, increasing 5.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 15%.
InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 141.13%. Shares of IDCC have declined 14% in the past year.
The Zacks Consensus Estimate for Vishay Intertechnology’s 2022 earnings is pegged at $2.68 per share, rising 10.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 22.7%.
Vishay Intertechnology’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 4.96%. Shares of VSH have declined 16.7% in the past year.
The Zacks Consensus Estimate for Pure Storage’s fiscal 2023 earnings is pegged at 86 cents per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 30.9%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 99.2%. Shares of PSTG have gained 44.3% in the past year.
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