Emerson is selling a majority stake in its Climate Technologies business to private equity funds managed by Blackstone in a transaction valuing the HVAC/R business segment at US$14.0 billion.
The standalone Climate Technologies business includes the Copeland compressor business and a portfolio of products and services representing approximately US$5 billion in revenue for the company’s fiscal 2022 (ended Sept. 30, 2022).
Emerson will receive cash proceeds of approximately US$9.5 billion and retain 45% common equity ownership of the standalone Climate Technologies business, which will be structured as a joint venture between Emerson and Blackstone, until its potential sale or IPO (initial public offering). Among brands under the Climate Technologies business include: Copeland, White-Rodgers, Sensi, Vilter (industrial compressors), and Dixell Electronics (controls).
Emerson’s focus going forward is transitioning to a global automation company with software and technology solutions for manufacturing and processing industries among other diversified end markets.
“Today’s announcement is a definitive step in the portfolio journey we embarked on when I became CEO in early 2021,” said Lal Karsanbhai, president/CEO of Emerson in a company release. “Over the past 18 months, the Emerson team has accelerated our portfolio transformation, divesting non-core businesses including InSinkErator [sold to Whirlpool Corp.] and Therm-O-Disc [sold in March], while investing in organic growth opportunities and important transactions including AspenTech [a process automation control company].”
“Copeland is the market leader in supplying critical components for residential, commercial and refrigeration climate control systems. The business is poised for accelerated growth as it leads the way in helping consumers and businesses shift to more energy-efficient heating and cooling products as part of their carbon reduction efforts. We are thrilled to back the business’ dedicated team as they continue to innovate and deliver energy-efficient solutions to their customers,” said Joe Baratta, global head of Blackstone Private Equity, in the media release.
The transaction has been approved by Emerson’s Board of Directors and is expected to close in the first half of the calendar year 2023.
As part of the transaction, Emerson will also sell ownership of its St. Louis, Missouri campus to the joint venture. Emerson will enter a three-year lease on the headquarters with an option to extend.
emerson.com
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