Carrier Announces Agreement to Sell Industrial Fire Business to Sentinel Capital Partners for $1.425 Billion
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Insights
The divestiture of Carrier Global Corporation's Industrial Fire business for $1.425 billion to Sentinel Capital Partners is a strategic move that will streamline the company's operations and focus on its core competencies. The transaction is expected to generate net proceeds exceeding $1.1 billion, which the company plans to utilize in reducing its debt levels. This is a significant step towards achieving a more robust financial structure, aiming for a 2X net leverage ratio by the end of 2024.
The sale is part of a broader portfolio transformation that includes the acquisition of Viessmann Climate Solutions and the sale of other non-core businesses. This reshaping of Carrier's portfolio is indicative of a shift towards higher growth areas, potentially enhancing shareholder value. The company's intention to resume share repurchases post-transaction reflects confidence in its financial health and commitment to return capital to shareholders, which could be a positive signal to the market.
Carrier's decision to sell its Industrial Fire business aligns with its strategy to concentrate on intelligent climate and energy solutions, a sector with high growth potential. The divestiture allows Carrier to shed non-core assets and reinvest in areas that support its vision. The sale includes established brands with a strong presence in critical infrastructure and high-hazard industries, suggesting that Sentinel Capital Partners is acquiring a business with a solid market position and potential for continued growth.
Looking at the broader industry, such strategic divestitures and acquisitions are common as companies seek to optimize their product and service offerings. Carrier's focus on intelligent climate solutions is timely, given the increasing global emphasis on energy efficiency and smart technology integration. The company's portfolio transformation could position it favorably against competitors as it leverages emerging market trends.
The transaction is subject to regulatory approvals and customary closing conditions, which is standard for deals of this magnitude. The involvement of top-tier legal advisors like Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP underscores the complexity and significance of the deal. These firms will navigate the legal intricacies to ensure compliance with relevant laws and regulations.
Given the global footprint of Carrier's Industrial Fire business, the legal teams will likely address various jurisdictional regulations, which can impact the deal timeline and structure. It's crucial for investors to monitor the progress of regulatory approvals, as any hurdles could delay or even jeopardize the transaction, affecting Carrier's strategic plans and financial projections.
With approximately 1,400 employees operating in more than 20 countries, Carrier's Industrial Fire business is a global leader in fire detection and suppression solutions for high-hazard applications across verticals such as critical infrastructure, oil and gas, marine and clean energy. This pending sale will allow the business to build on the strength of its advanced lifecycle solutions, strong customer relationships and high growth potential across key segments.
"Industrial Fire is a great business with leadership positions in the markets in which it operates, and an engaged, experienced team focused on delivering differentiated solutions to customers. We look forward to watching its continued growth under the ownership of Sentinel," said Carrier Chairman & CEO David Gitlin. "This transaction marks another milestone in our transformation as we become a more focused, higher growth company, and furthers our vision to become the global leader in intelligent climate and energy solutions."
Carrier expects net proceeds from the transaction to exceed
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are serving as financial advisor to Carrier. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP are providing external legal counsel.
About Carrier
Carrier Global Corporation, global leader in intelligent climate and energy solutions, is committed to creating solutions that matter for people and our planet for generations to come. From the beginning, we've led in inventing new technologies and entirely new industries. Today, we continue to lead because we have a world-class, diverse workforce that puts the customer at the center of everything we do. For more information, visit www.corporate.carrier.com or follow Carrier on social media at @Carrier.
Cautionary Statement
This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. These forward-looking statements are intended to provide management's current expectations or plans for Carrier's future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident," "scenario" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to the sale of our industrial fire business, expected uses of the net proceeds therefrom, strategies or transactions of Carrier, Carrier's plans with respect to its indebtedness and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see Carrier's reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the
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SOURCE Carrier Global Corporation
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