Johnson Controls to Sell Power Solutions Business to Brookfield Business Partners for $13.2 Billion -- Update
November 13 2018 - 10:24AM
Dow Jones News
By Aisha Al-Muslim
Johnson Controls International PLC has made a deal to sell its
automotive battery business to Brookfield Business Partners L.P.
and its partners for $13.2 billion in cash.
The deal for Johnson Controls' power solutions business
announced Tuesday with Brookfield Business Partners, along with its
partner Canadian pension fund company Caisse de dépôt et placement
du Québec, doesn't include debt, a Johnson Controls spokesman said.
The transaction is expected to close by June 30.
With the sale of the battery business, Johnson Controls, an
industrial and technology conglomerate with headquarters in Cork,
Ireland, will streamline its portfolio to focus on its buildings
business, Chief Executive George Oliver said in prepared
remarks.
In March, Johnson Controls hired investment bank Centerview
Partners to help it explore strategic alternatives for the
business.
Net cash proceeds from the deal are expected to be $11.4 billion
after tax and transaction-related expenses. Johnson Controls
expects to use $3 billion to $3.5 billion of the proceeds toward
paying down debt and return the remainder to shareholders, the
company said.
Johnson Controls' power solutions business, which is the world's
largest maker of automotive batteries, generated $8 billion in
revenue and $1.68 billion in earnings before interest, taxes,
depreciation and amortization in the year ended Sept 30, 2018. The
deal price is nearly eight times the trailing 12-month EBITDA.
Operating results of Johnson Controls' power solutions business
will be reported in discontinued operations starting in the first
fiscal quarter of 2019. The unit has 15,000 employees.
Brookfield Business Partners is a publicly listed vehicle
through which Brookfield Asset Management owns and operates the
business services and industrial assets acquired through its
private-equity business.
Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com
(END) Dow Jones Newswires
November 13, 2018 10:09 ET (15:09 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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