Johnson Controls To Buy Air Distribution Technologies For $1.6 Bln

(RTTNews) - Auto parts supplier Johnson Controls, Inc. (JCI) agreed Wednesday to acquire Air Distribution Technologies, Inc. from its owner Canada Pension Plan Investment Board or CPPIB, for about $1.6 billion in a bid to expand its buildings business. The deal, which is subject to limited conditions, is expected to close by the end of July.

"This investment expands Johnson Controls' position in the buildings space with additional products that are complementary to our existing heating, ventilation and air conditioning offerings. It reflects our stated commitment to invest in the buildings business as a growth platform and further enhances our offerings and channels," Johnson Controls chairman and CEO Alex Molinaroli said in a statement.

Air Distribution Technologies is an independent provider of air distribution and ventilation solutions for residential and non-residential buildings as well as air movement and control solutions for industrial and infrastructure applications in North America.

The company is using its manufacturing facilities in China, the Middle East, and India that were added in recent years to leverage its global brands and increased presence overseas. Its brands include Ruskin, Titus, Hart & Cooley, Krueger, PennBarry, Tuttle & Bailey.

CPPIB acquired Air Distribution from British engineering firm Tomkins Ltd. in 2012 for $1.1 billion of which about $500 million was funded with equity from CPPIB.

Upon closing of the currently proposed sale, CPPIB is expected to receive proceeds of about $1 billion.

Milwaukee, Wisconsin-based Johnson Controls noted that Air Distribution Technologies would be aligned under its Building Efficiency platform and will operate with its own brands, distribution channels and employees.

The acquired business will be guided jointly by Johnson Controls and Air Distribution Technologies leadership.

Johnson Controls noted that the customers of Air Distribution Technologies will have undisrupted access to the products and brands following the acquisition.

For the deal, Johnson Controls was advised by Goldman Sachs on strategic and financial aspects as well as Cleary Gottlieb Steen & Hamilton as legal representatives.

"Johnson Controls is a leader in the building technology industry that will complement our strong brands and valued relationships. Our customers will now have access to an unmatched portfolio of products and offerings as well as backing and continued innovation from the best experts in the industry," Air Distribution Technologies CEO Terry O'Halloran stated.

JCI closed Tuesday's regular trading session at $45.96, down $0.24 on a volume of 4.22 million shares. In the past 52-week period, the stock has been trading in a range of $31.95 to $52.50.