International. Gardner Denver Holdings, Inc. and Ingersoll-Rand plc announced that they have entered into a definitive agreement under which Ingersoll Rand will separate its industrial segment ("Ingersoll Rand Industrial") through a spin-off from Ingersoll Rand for shareholders and will then merge with Gardner Denver, creating a mission-critical flow creation company for specific industrial technologies and technologies ("IndustrialCo").
Today's Ingersoll Rand's HVAC (Heating, Ventilation and Air Conditioning) and transportation refrigeration assets will become a company focused exclusively on climate control solutions for buildings, homes and transportation ("ClimateCo").
IndustrialCo will comprise the entirety of Gardner Denver and Ingersoll Rand Industrial, including, subject to closing, Ingersoll Rand's acquisition of Precision Flow Systems ("PFS"), which is expected to close in mid-2019. IndustrialCo will be led by Gardner Denver CEO Vicente Reynal and executives from both companies. IndustrialCo is expected to be called Ingersoll Rand and operate under the Ingersoll Rand stock code. IndustrialCo will manage a diverse portfolio of iconic brands, including Gardner Denver. IndustrialCo's Board of Directors will be led by Gardner Denver President Peter Stavros. Michael W. Lamach, president and CEO of Ingersoll Rand, along with the current Executive Team of Ingersoll Rand, will continue to lead ClimateCo, which is expected to change its name.
Under the terms of the agreement, which was unanimously approved by the Boards of Directors of Ingersoll Rand and Gardner Denver, at closing, ClimateCo will receive $1.9 billion in cash from Ingersoll Rand Industrial, funded by a new debt issue assumed by Gardner Denver in the merger. Upon closing of the transaction, current Ingersoll Rand shareholders will receive 50.1% of IndustrialCo's shares on a full dilution basis, which are valued at approximately $5.8 billion4. Current shareholders of Gardner Denver will retain 49.9% of IndustrialCo's shares on a full dilution basis. The transaction is expected to be tax-free for shareholders of Ingersoll Rand and Gardner Denver for U.S. federal tax purposes.
This transaction will create a global leader in creating critical flow for specific missions and industrial technologies, and accelerate both companies' strategic priorities that involve deploying talent, driving growth, expanding margins through greater efficiency, and allocating capital effectively." Vicente Reynal declared. "Together, the gardner Denver and Ingersoll Rand industrial segments have more than 300 years of history, and are recognized for their commitment to operational excellence, innovation and quality."
