Johnson Controls International (NYSE: JCI) today announced an agreement to sell its Power Solutions business to Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN) together with institutional partners including Caisse de dépôt et placement du Québec in a cash transaction valued at $13.2 billion. Johnson appears to be selling a profitable business unit with a bright future in order to bolster other businesses.
Net cash proceeds are expected to be $11.4 billion after tax and transaction-related expenses. Johnson expects to deploy $3.0 to $3.5 billion of proceeds towards debt paydown and retain an investment grade credit rating. The remaining proceeds will be available to return to shareholders, with details to be announced around the close of the transaction.
“With this transaction, Johnson Controls becomes a pure-play building technologies and solutions provider that is better positioned to lead the integration and evolution of the connected building and to capture strategic opportunities in the HVAC industry,” claimed chairman and chief executive officer George Oliver.
Johnson Controls’ Power Solutions business works in partnership with its customers to meet increasing electrification requirements in vehicles. The 15,000 Power Solutions employees create, manufacture, and distribute the most advanced battery technologies for virtually every type of vehicle. These technologies deliver uniquely sustainable, next-generation performance.
In fiscal 2018, Power Solutions generated $8.0 billion in revenue and $1.68 billion in earnings before interest, taxes, depreciation and amortization (“EBITDA”). The transaction price of $13.2 billion represents a multiple of 7.9x trailing twelve-month EBITDA.
The transaction is expected to close by June 30, 2019, subject to customary closing conditions and required regulatory approvals. Power Solution’s operating results will be reported in discontinued operations beginning in the first fiscal quarter of 2019.
Johnson Controls
Johnson Controls is a global technology and multi industrial firm serving a wide range of customers in more than 150 countries. About 120,000 employees create intelligent buildings, efficient energy solutions, integrated infrastructure and next generation transportation systems that work to deliver on the promise of smart cities and communities.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Johnson Controls to Sell Power Solutions for $13.2 Billion
Johnson Controls International (NYSE: JCI) today announced an agreement to sell its Power Solutions business to Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN) together with institutional partners including Caisse de dépôt et placement du Québec in a cash transaction valued at $13.2 billion. Johnson appears to be selling a profitable business unit with a bright future in order to bolster other businesses.
Net cash proceeds are expected to be $11.4 billion after tax and transaction-related expenses. Johnson expects to deploy $3.0 to $3.5 billion of proceeds towards debt paydown and retain an investment grade credit rating. The remaining proceeds will be available to return to shareholders, with details to be announced around the close of the transaction.
“With this transaction, Johnson Controls becomes a pure-play building technologies and solutions provider that is better positioned to lead the integration and evolution of the connected building and to capture strategic opportunities in the HVAC industry,” claimed chairman and chief executive officer George Oliver.
Johnson Controls’ Power Solutions business works in partnership with its customers to meet increasing electrification requirements in vehicles. The 15,000 Power Solutions employees create, manufacture, and distribute the most advanced battery technologies for virtually every type of vehicle. These technologies deliver uniquely sustainable, next-generation performance.
In fiscal 2018, Power Solutions generated $8.0 billion in revenue and $1.68 billion in earnings before interest, taxes, depreciation and amortization (“EBITDA”). The transaction price of $13.2 billion represents a multiple of 7.9x trailing twelve-month EBITDA.
The transaction is expected to close by June 30, 2019, subject to customary closing conditions and required regulatory approvals. Power Solution’s operating results will be reported in discontinued operations beginning in the first fiscal quarter of 2019.
Johnson Controls
Johnson Controls is a global technology and multi industrial firm serving a wide range of customers in more than 150 countries. About 120,000 employees create intelligent buildings, efficient energy solutions, integrated infrastructure and next generation transportation systems that work to deliver on the promise of smart cities and communities.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.