Carrier Announces Close of $1.425B Sale of its Industrial Fire Business
Carrier Global (NYSE: CARR) announced the completion of its Industrial Fire business sale to Sentinel Capital Partners for $1.425 billion. The deal aligns with Carrier's portfolio transformation strategy and marks the second completed sale. CEO David Gitlin highlighted the company's progress and anticipated the closure of its Commercial Refrigeration sale by Q3 2024. Carrier plans to use approximately $1.1 billion in net proceeds to pay down debt, targeting a net leverage ratio of ~2x by the end of 2024. The company also aims to resume share repurchases in 2024. Financial advisors for the transaction were Goldman Sachs and J.P. Morgan Securities, with legal counsel from Paul, Weiss, Rifkind, Wharton & Garrison and Linklaters.
- Completed sale of Industrial Fire business for $1.425 billion.
- Net proceeds of approximately $1.1 billion to be used to pay down debt.
- Expected return to ~2x net leverage by end of 2024.
- Plan to resume share repurchases in 2024.
- Anticipated closure of Commercial Refrigeration sale by Q3 2024.
- None.
Insights
The sale of Carrier's Industrial Fire business for
For investors, a lower debt ratio generally means reduced risk, while share buybacks can enhance shareholder value by decreasing the number of shares outstanding, thereby increasing earnings per share (EPS). It's important to monitor how the proceeds are employed and whether Carrier meets its financial targets.
Carrier’s strategic realignment through the sale of its Industrial Fire business is part of a broader portfolio transformation. This move allows Carrier to focus more on its core segments like intelligent climate and energy solutions, which are expected to have higher growth trajectories. The industrial fire segment might have been less synergistic with their core business and hence divesting it could streamline operations and focus on more lucrative areas. The ongoing sales process of their Commercial and Residential Fire businesses, along with the upcoming Commercial Refrigeration sale, indicates a shift towards a more focused and possibly higher-margin business model.
For investors, such strategic realignments can lead to a more efficient allocation of resources and potentially higher returns. It's important to keep an eye on how these divestitures impact the overall revenue and profitability mix in the future.
The successful completion of the sale to Sentinel Capital Partners underlines the importance of meticulous legal and financial planning. The involvement of prominent legal firms such as Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP signifies the complexity and thoroughness required in such high-value transactions. Ensuring compliance with regulatory requirements and securing favorable terms are vital in preserving shareholder value and avoiding post-transaction liabilities. The completion of this sale without any reported legal or regulatory hurdles is a positive indicator of Carrier's robust legal and compliance framework.
From an investor perspective, confidence in the company's ability to execute large-scale transactions smoothly can bolster trust in management's capability to navigate future strategic initiatives and market challenges.
- Net proceeds of approximately
$1.1B - Global Commercial Refrigeration sale expected to close by the end of Q3
- Sale process of Commercial and Residential Fire progressing as expected
"We continue to make great progress on our planned business exits, with today marking the second completed sale of Carrier's portfolio transformation process," said Carrier Chairman & CEO David Gitlin. "We expect to close the Commercial Refrigeration sale by the end of the third quarter of this year, and the sale process of Commercial and Residential Fire is progressing as expected. I want to extend my personal thanks to the Industrial Fire employees for their contributions to the business and our customers over the years."
Carrier intends to use net proceeds from the Industrial Fire sale to pay down debt, expecting to return to ~2x net leverage by the end of 2024. As previously disclosed, the company also expects to resume share repurchases in 2024.
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 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
CARR-IR
Contact:
Investor Relations
Sam Pearlstein
561-365-2251
Sam.Pearlstein@Carrier.com
Media Inquiries
Jason Shockley
561-542-0207
Jason.Shockley@Carrier.com
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SOURCE Carrier Global Corporation
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