Pentair is selling its valves and controls business to a motor control and power conversion technology manufacturer in a $US3.15 billion deal.
The deal with Emerson is anticipated to be completed in late 2016 or early 2017 after meeting customary closing conditions and necessary regulatory approvals.
Pentair Pentair Chairman and CEO Randall Hogan said, “We expect this transaction to provide Pentair the ability to advance our strategy, drive growth, and focus resources on three segments, all of which we believe have attractive growth characteristics.”
Pentair acquired the Valves and Controls business in 2012 through an all-stock merger with the Flow Control business of Tyco International. Valves and Controls’ 2015 revenue was $US1.8 billion.
“Through the hard work of dedicated employees, we significantly improved Valves and Controls’ operating profit, creating shareholder value.
“Additionally, the Flow Control acquisition provided the scale and capital structure to further enable our strategy for growth,” Mr Hogan said.
Following the closing of the transaction, Pentair’s business will consist of three segments, Water Quality Systems, Flow and Filtration Solutions, and Technical Solutions, aligned with global trends to deliver solutions around water quality and availability, equipment and building protection, industrial and process efficiency, and food and beverage processing.
“We remain narrowly diversified, which allows us to prioritize investments and affords us opportunities to grow organically and use our strengthened balance sheet as opportunities arise,” Mr Hogan said.
Emerson Chairman and Chief Executive Officer David Farr said, “This acquisition delivers on our strategic plan of investing in Automation Solutions and in markets where we have a global leadership position and see significant long-term growth opportunities.
“By adding Pentair’s Valves and Controls leading technologies and services to our already broad portfolio, we have positioned our businesses to grow while continuing to provide our customers around the world with more complete solutions to their toughest challenges.”
This transaction follows Emerson’s recently announced divestitures of Network Power, Leroy-Somer and Control Techniques for a total of $US5.2 billion as part of the Company’s overall strategic portfolio repositioning that was initiated in June 2015.
Executive Vice President and Business Leader for Emerson Automation Solutions Mike Train said, “The Pentair Valves and Controls business is a strong fit for us as they share many of the same management principles that have defined success for Emerson over the years such as global customer support, service, best cost sourcing and manufacturing.
“In addition to adding great people and brands to our business, it will allow us to expand our market position and create new opportunities for growth, while also being able to offer our customers the most complete valve solutions portfolio and most extensive service network in the world.”