Page 25 - Climate Control News Magazine March 2019

Commercial Air Conditioning
Speculation buzz at Ingersoll-Rand
INGERSOLL-RAND, OWNER OF Trane and Thermo King, last month announced a $US1.45 bil- lion deal to purchase Precision Flow Systems (PFS).
It is the most the company has invested in an acquisition since 2008 when it spent $US10 bil- lion to acquire heating and air conditioner sup- plier, Trane.
Within days of the deal being announced finan- cial news provider, Bloomberg, began speculating about the company's “random assortment of in- dustrial products” and whether Ingersoll-Rand was setting the stage for a shake-up of its assets.
Bloomberg columnist, Brooke Sutherland, said it may finally be time for Ingersoll-Rand to sepa- rate its heating, air conditioning and refrigeration operations, which make up the majority of its rev- enue, to be separated from the rest of the company.
“It’s a smart, well-priced deal, but at a time when industrial companies across the spectrum are rethinking the value of conglomerate portfo- lios every acquisition must be viewed through a breakup prism,” Sutherland said.
“Ingersoll-Rand’s history shows it is willing to go for- ward with reshuffling when it makes sense. The company acquired commercial refriger- ation-equipment maker Huss- mann International for $AUD2.53 billion in 2000, then later sold a majority stake to private equity firm Clayton Dubilier & Rice.”
Ingersoll Rand CEO, Michael W.
Lamach, said the acquisition is compelling both strategically and financially for its customers and shareholders.
Prior to this buyout agreement, Ingersoll- Rand added ICS Group Holdings Limited to its portfolio in January 2018. Since then, ICS Group has been strengthening Ingersoll-Rand's com- mercial HVAC business. Also, Ingersoll-Rand formed a 50-50 joint venture with Mitsubishi Electric Corporation in May 2018.
Products from heating and air conditioner supplier, Trane.
Last year PFS generated reve- nues of $AUD561.88 million and is primarily engaged in provid- ing pump and flow management systems for use in process, agri- culture, water, pharmaceuticals, food, and beverage markets.
Ingersoll-Rand intends to inte- grate PFS assets with its industrial segment of the business which provided 22.9% of
net revenues in the fourth quarter of 2018. Ingersoll-Rand said the PFS buyout will strengthen its existing fluid management busi- ness through technical expertise as well as the addition of nearly 1,000 employees, a strong management team and seven global manufac-
turing locations.
The transaction is subject to regulatory ap-
provals but should be completed mid-2019. ✺
CLIMATE CONTROL NEWS MARCH 2019
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