U.S. manufacturer Emerson on October 31 announced a definitive agreement to sell a majority stake in its Climate Technologies1 business to private equity funds managed by New York-based Blackstone in a transaction valuing Climate Technologies at US$14.0 billion.
Climate Technologies, which includes the Emerson Commercial & Residential Solutions division, encompasses HVAC&R products, including Copeland compressors, controls and other technologies using natural refrigerants like CO2 (R744) and propane (R290).
Emerson will receive upfront, pre-tax cash proceeds of approximately $9.5 billion while retaining a non-controlling ownership interest in a new standalone Climate Technologies joint venture.
The standalone business includes the Copeland compressor business and the entire portfolio of products and services across all HVAC and refrigeration end-markets, representing approximately $5.0 billion of fiscal 2022 sales.
The transaction has been unanimously approved by Emerson’s Board of Directors and is expected to close in the first half of the calendar year 2023, subject to regulatory approvals and customary closing conditions.
“This is a marquee transaction for our private equity business.”
Joe Baratta, Blackstone
“This is a marquee transaction for our private equity business and a testament to our ability to deliver solutions to our partners even in difficult economic and market environments,” said Joe Baratta, Global Head of Blackstone Private Equity. “We are proud to be partnered with Emerson to help drive the next stage of growth for this great business. Copeland is the market leader in supplying critical components for residential, commercial and refrigeration climate control systems. The business is poised for accelerated growth as it leads the way in helping consumers and businesses shift to more energy-efficient heating and cooling products as part of their carbon reduction efforts. We are thrilled to back the business’ dedicated team as they continue to innovate and deliver energy-efficient solutions to their customers.”
“We look forward to working closely with Blackstone to ensure a smooth transition for Climate Technologies’ employees and customers,” said Lal Karsanbhai, President and Chief Executive Officer of Emerson.
Emerson’s Commercial & Residential Solutions business has been increasing its global R&D efforts, focusing on simplifying the application of CO2 refrigeration systems. The company has recently launched two new controllers that require less programming than previously, expanded its CO2 compressor portfolio and adopted a new communication and education strategy.
Along with the new products, Emerson Commercial & Residential Solutions has been engaged in building four new labs for CO2 technology development at its Sidney, Ohio, campus.
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