Marlin Equity, Emerson vie for Open Systems International

Marlin Equity and Emerson Electric are finalists in the auction for founder-led Open Systems International, four sources familiar with the situation told PE Hub.

It’s unclear where final bids came in; however, those valued at 20x EBITDA, or approximately $1.1 billion, were denied after the second round, one of the sources said.

In April, PE Hub reported that interested parties bidding north of $900 million were expected to enter the auction’s second round.

Carlyle Group, Thomas H. Lee and Providence Equity dropped out of the process, the people said.

OSI, based in Medina, Minnesota, provides automation software for real-time management and optimization of production, transport and delivery networks for utilities in the electric, oil and gas, transportation and water industries.

OSI has grown significantly since its founding in 1992 by Bahman Hoveida and Ron Ingram.

The company produces around $55 million in EBITDA and around $175 million in revenue, sources told PE Hub in April.

OSI isn’t expected to be significantly impacted by the pandemic downturn as its business model is subscription-based, some of the sources said.

Broadly, the structure of subscription contracts is an important factor to evaluate when it comes to the company’s risk positioning, tech investors and bankers told PE Hub in early April.

Wells Fargo and Lazard Freres are advising OSI on its sale process.

Emerson and Wells Fargo declined to comment. OSI, Lazard, and Marlin Equity did not return PE Hub‘s requests for comment.

Action Item: Read PE Hub’s previous coverage on OSI Systems’ sale process.