Emerson Buying Avocent for $1.2 Billion

Emerson Electric officials are looking to expand what they can offer data center administrators by buying Avocent for $1.2 billion.

Emerson offers products—from power and cooling supplies to racks and enclosures—designed to help businesses manage their IT infrastructure and reduce energy costs in their data centers. Buying Avocent will enable Emerson to enhance its data center management and monitoring capabilities.

Avocent’s technologies will complement those from the Emerson Network Power business, which includes power management, cooling and energy-saving products.

“Combining Avocent’s technologies, relationships and installed base with Emerson’s power and cooling presence allows us to offer a more compelling solution to our data center customers’ most pressing challenge—energy efficiency,” David N. Farr, Emerson chairman, president and CEO, said in a statement. “It furthers our customers’ ability to better manage reliability, availability and lifecycle costs through a simple yet comprehensive view of the complete data center physical infrastructure.”

The deal, announced Oct. 6, is expected to close by Jan. 1, 2010, according to both companies. Avocent had about $657 million in sales in 2008. Emerson generated about $2.6 billion in revenues related to data center products.

Data center power and cooling costs continue to be key concerns for businesses, which are seeing a growing percentage of their IT budgets being spent there. The federal Environmental Protection Agency in 2006 estimated that data centers accounted for 1.5 percent of all the electricity that is consumed in the United States. That figure represents about 61 billion kilowatt-hours of electricity, double the amount consumed by data centers in 2000.