By Lisa Kerner
Charlotte, N.C., Dec. 17 - Ingersoll-Rand Co., Ltd. agreed to acquire Trane Inc. (formerly American Standard Cos. Inc.) for approximately $10.1 billion, including transaction fees and the assumption of some $150 million of Trane net debt.
The companies' definitive agreement calls for Trane shareholders to receive $36.50 in cash and 0.23 of a share of Ingersoll-Rand common stock for each Trane share held. The total consideration is $47.81 per share based on Dec. 14 closing stock prices.
The transaction is slated to close late in the first quarter or early in the second quarter of 2008.
Annual pre-tax cost and revenue synergies as a result of the merger are expected to be more than $300 million by 2010, an Ingersoll-Rand news release stated.
"The combination of Ingersoll-Rand and Trane will create a global, diversified industrial company with projected pro forma 2008 revenues of $17 billion," Ingersoll-Rand chairman, president and chief executive officer Herbert L. Henkel said in the release.
"We believe the new Ingersoll-Rand will be capable of sustaining annual organic revenue growth averaging 5% to 7% and EPS growth exceeding 15% per year, both in excess of our former growth guidance. In particular, assuming timely consummation of the proposed acquisition, we anticipate earnings of $4.00 per share in 2008," Herbert added.
Trane chairman and CEO Fred Poses will remain in his position until the acquisition is completed.
Ingersoll-Rand was advised by Credit Suisse, Goldman, Sachs & Co. and J.P. Morgan Securities Inc., while Trane was advised by Lazard.
Trane provides heating, ventilation and air conditioning systems, dehumidifying and air cleaning products and advanced building controls to commercial and residential markets. The company is based in Piscataway, N.J.
Ingersoll-Rand is a diversified industrial firm based in Hamilton, Bermuda.
| Acquirer: | Ingersoll-Rand Co.
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| Target: | Trane Inc.
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| Announcement date: | Dec. 17
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| Transaction total: | $10.1 billion
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| Price per share: | $36.50 in cash and 0.23 of an Ingersoll-Rand share
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| Expected closing: | Late first quarter or early second quarter of 2008
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| Stock price for acquirer: | NYSE: IR: $49.18 on Dec. 14
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| Stock price of target: | NYSE: TT: $47.46 on Dec. 14
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