Emerson to Buy Pentair Valves-and-Controls Unit for $3.15 Billion -- 2nd Update
August 18 2016 - 8:25PM
Dow Jones News
By Josh Beckerman
Emerson Electric Co. has agreed to buy Pentair PLC's
valves-and-controls unit for $3.15 billion, part of a strategy to
expand its automation offerings.
The Schaffhausen, Switzerland, business has nearly 7,500
employees and serves sectors including chemicals, energy, power and
mining. Its brands include Anderson-Greenwood, Crosby and Vanessa.
Pentair said revenue for the unit was $1.8 billion in 2015.
The Wall Street Journal reported in June that Pentair was
working with Citigroup Inc. on a possible sale of the business,
potentially for more than $2 billion. The business was acquired as
part of a $4.5 billion deal with Tyco International Ltd. in
2012.
The transaction is expected to close in four to six months.
In after-hours trading, Emerson shares were flat at $54.67,
while Pentair rose 41 cents to $66.94.
In June 2015, Emerson announced a plan to reposition itself,
including the spinoff its network-power business and the potential
sale of part of its industrial-automation group.
In lieu of a spinoff, Emerson said on Aug. 2 that it would sell
the network-power unit to investors including Platinum Equity for
about $4 billion. Emerson will retain a subordinated interest in
the business. Emerson also agreed to sell its motors, drives and
electric power generation business to Japan's Nidec Corp. for $1.2
billion. At the time, Emerson Chief Executive David Farr said the
company was pursuing acquisitions.
Emerson's second-quarter sales fell 7% to $5.1 billion, a
decline the company attributed to issues including global
uncertainty and weak energy markets.
Pentair said the sale will help it focus on its three remaining
segments: water quality systems, flow and filtration solutions, and
technical solutions.
Pentair's second-quarter sales increased 4% to $1.73 billion.
The company said results were at the high end of its
expectations.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
August 18, 2016 20:10 ET (00:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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