Posted 2:44 pm Monday, December 17, 2007
Ingersoll-Rand Buys Trane in $10B Deal
By GREG JUNEK
Business Editor
Ingersoll Rand Co. Ltd. will acquire Trane Inc., in a transaction valued at approximately $10.1 billion, the companies announced today.
An Ingersoll-Rand spokesman said employees of the Tyler Trane plant will not be immediately affected by the acquisition.
“It’s premature to talk about any specific integration plans, but I think for the most part it’s going to be business as usual for most employees and locations,” said the spokesman, Paul Dickard.
The Tyler plant has approximately 2,112 employees, according to information in the Tyler Economic Development Council’s 2007 Manufacturers/Processors Directory.
The Tyler plant, originally a General Electric air conditioner plant, opened in July 1956. Trane purchased the business in 1982. Trane became a division of American Standard in 1984.
Ingersoll Rand will acquire all outstanding common stock of Trane. Holders of Trane’s approximately 200 million common shares will receive a combination of $36.50 in cash and 0.23 Ingersoll Rand shares of common stock per each Trane share, the companies said.
The total value for this transaction was $47.81 per Trane share based on the closing price on Friday. The companies anticipate the transaction to close late in the first quarter or early in the second quarter 2008, and it is subject to approval by Trane shareholders and regulatory parties.
“The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with projected pro forma 2008 revenues of $17 billion," said Herbert L. Henkel, Ingersoll Rand chairman, president and chief executive officer, in a statement.
Fred Poses, Trane chairman and CEO said, the offer represents an attractive price for its shareholders.
“Combining Trane and Ingersoll Rand’s climate control operation creates a very strong business,” Poses said in a statement. “With the size, strength and operational effectiveness of a $17 billion global industrial company, we believe this combination is best for our customers, employees and shareowners in the long term.”
Poses will remain in his position until the acquisition is completed.
Ingersoll Rand, whose products include air compressors, climate control equipment, tools, locks and larger-scale security integration projects, has its corporate headquarters in Hamilton, Bermuda, with U.S. executive offices in Montvale, N.J. Its 2007 annual revenues are projected to be approximately $8.7 billion. The company has 35,000 employees and 80 manufacturing facilities worldwide.
Trane, based in Piscataway, N.J., has more than 29,000 employees and 29 production facilities worldwide. Its 2007 annual revenues are expected to approximate $7.4 billion.
The deal — one of the largest industrial buyouts in recent years — gives Ingersoll-Rand, which makes Thermo King refrigerated trucks, access to Trane's building and transportation cooling systems.
"This acquisition represents a significant next step in Ingersoll-Rand's decade-long transformation to become a leading global diversified industrial company, with strong market positions across the climate control, industrial and security markets," said Chief Executive Officer Herbert Henkel.
Trane's shares jumped 23 percent, while Ingersoll-Rand's dipped nearly 8 percent Monday.
Ingersoll-Rand manufactures everything from golf carts to home security and has a significant climate control business.
Trane, formerly known as American Standard Companies Inc., focuses its business almost exclusively on residential and commercial climate control.
Combining the climate control operations of Trane and Ingersoll-Rand "creates a very strong business," said Fred Poses, Trane chairman and CEO.
The combined company is expected to have 2008 revenues of $17 billion, slightly more than double the current revenue for each.
"The timing of this combination is close to perfect for both companies," Henkel told analysts during a conference call, noting both companies have made major divestments in recent months that sharpen their focus.
Trane recently sold off its kitchen and bath business, as well as its auto braking systems business. It's keeping the well-known American Standard brand name for its heating, ventilating and air conditioning and related products.
The deal is expected to close in spring 2008 and requires approval by regulators and Trane shareholders, as well as usual closing conditions.
In midday trading on the New York Stock Exchange common Trane shares jumped $8.62 to $45.82, while Ingersoll-Rand shares dropped $3.88, or 7.9 percent, to $45.30.
On the Net:
http://www.ingersollrand.com
http://www.trane.com
The Associated Press contributed to this report.
Updated Monday, Dec. 17, 2007 at 4:13 p.m. CST
Business Editor
Ingersoll Rand Co. Ltd. will acquire Trane Inc., in a transaction valued at approximately $10.1 billion, the companies announced today.
An Ingersoll-Rand spokesman said employees of the Tyler Trane plant will not be immediately affected by the acquisition.
“It’s premature to talk about any specific integration plans, but I think for the most part it’s going to be business as usual for most employees and locations,” said the spokesman, Paul Dickard.
The Tyler plant has approximately 2,112 employees, according to information in the Tyler Economic Development Council’s 2007 Manufacturers/Processors Directory.
The Tyler plant, originally a General Electric air conditioner plant, opened in July 1956. Trane purchased the business in 1982. Trane became a division of American Standard in 1984.
Ingersoll Rand will acquire all outstanding common stock of Trane. Holders of Trane’s approximately 200 million common shares will receive a combination of $36.50 in cash and 0.23 Ingersoll Rand shares of common stock per each Trane share, the companies said.
The total value for this transaction was $47.81 per Trane share based on the closing price on Friday. The companies anticipate the transaction to close late in the first quarter or early in the second quarter 2008, and it is subject to approval by Trane shareholders and regulatory parties.
“The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with projected pro forma 2008 revenues of $17 billion," said Herbert L. Henkel, Ingersoll Rand chairman, president and chief executive officer, in a statement.
Fred Poses, Trane chairman and CEO said, the offer represents an attractive price for its shareholders.
“Combining Trane and Ingersoll Rand’s climate control operation creates a very strong business,” Poses said in a statement. “With the size, strength and operational effectiveness of a $17 billion global industrial company, we believe this combination is best for our customers, employees and shareowners in the long term.”
Poses will remain in his position until the acquisition is completed.
Ingersoll Rand, whose products include air compressors, climate control equipment, tools, locks and larger-scale security integration projects, has its corporate headquarters in Hamilton, Bermuda, with U.S. executive offices in Montvale, N.J. Its 2007 annual revenues are projected to be approximately $8.7 billion. The company has 35,000 employees and 80 manufacturing facilities worldwide.
Trane, based in Piscataway, N.J., has more than 29,000 employees and 29 production facilities worldwide. Its 2007 annual revenues are expected to approximate $7.4 billion.
The deal — one of the largest industrial buyouts in recent years — gives Ingersoll-Rand, which makes Thermo King refrigerated trucks, access to Trane's building and transportation cooling systems.
"This acquisition represents a significant next step in Ingersoll-Rand's decade-long transformation to become a leading global diversified industrial company, with strong market positions across the climate control, industrial and security markets," said Chief Executive Officer Herbert Henkel.
Trane's shares jumped 23 percent, while Ingersoll-Rand's dipped nearly 8 percent Monday.
Ingersoll-Rand manufactures everything from golf carts to home security and has a significant climate control business.
Trane, formerly known as American Standard Companies Inc., focuses its business almost exclusively on residential and commercial climate control.
Combining the climate control operations of Trane and Ingersoll-Rand "creates a very strong business," said Fred Poses, Trane chairman and CEO.
The combined company is expected to have 2008 revenues of $17 billion, slightly more than double the current revenue for each.
"The timing of this combination is close to perfect for both companies," Henkel told analysts during a conference call, noting both companies have made major divestments in recent months that sharpen their focus.
Trane recently sold off its kitchen and bath business, as well as its auto braking systems business. It's keeping the well-known American Standard brand name for its heating, ventilating and air conditioning and related products.
The deal is expected to close in spring 2008 and requires approval by regulators and Trane shareholders, as well as usual closing conditions.
In midday trading on the New York Stock Exchange common Trane shares jumped $8.62 to $45.82, while Ingersoll-Rand shares dropped $3.88, or 7.9 percent, to $45.30.
On the Net:
http://www.ingersollrand.com
http://www.trane.com
The Associated Press contributed to this report.
Updated Monday, Dec. 17, 2007 at 4:13 p.m. CST
