On April 30, 2019, Ingersoll-Rand PLC (IR), announced that it would spin off its industrial business and merge it with industrial pumps and compressors producer Garden Denver Holdings (GDI) on a tax free basis, to create a company valued at $15BN. This spin-off is currently referred to as IndustrialCo and will keep the Ingersoll Rand name and ticker. In 2019, it is expected to generate $6.6BN of revenue and ~$1.6BN of adjusted EBITDA.
The remaining business will be named later but is currently referred to as ClimateCo. It will consist of the Trane and Thermo King brands of heating, air conditioning, and transport refrigeration systems. In 2019, it is expected to generate $12.9BN of revenue and ~$2BN of adjusted EBITDA.
Prior to the spin-off, ClimateCo will receive $1.9BN in cash (funded by newly issued debt) from IndustrialCo. Current Ingersoll-Rand shareholders will receive 50.1% of shares of IndustrialCo.
IR’s current market cap is $30BN while GDI’s current market cap is $7.1BN. This spin-off announcement is consistent with the trend of industrial companies spinning off non-core divisions to increase focus.
Spin-off Press Release – April 30, 2019
Spin-off Presentation – April 30, 2019
Spin-off Webcast – April 30, 2019
Spin-off Transcript – April 30, 2019
Reuters: Ingersoll-Rand to Spin-off Industrial Unit and Merge It With Gardner Denver – April 30, 2019