Johnson Controls diversifies away from autos with $1.6 billion deal
JCI CEO Alex Molinaroli: More business in the building space.
NEW YORK (Bloomberg) -- Johnson Controls Inc., seeking to lessen its reliance on the cyclical auto industry, agreed to acquire Texas-based ventilation products company, Air Distribution Technologies, for $1.6 billion.
Air Distribution Technologies is one of the largest independent providers of air-distribution and ventilation products in North America, with brands such as Ruskin, Titus, Hart & Cooley and Krueger, according to a statement today. The company is owned by the Canada Pension Plan, which oversees pensions for 18 million Canadians.
Johnson Controls, the largest U.S.-based auto supplier, is increasing its focus on its building-efficiency unit, which accounted for 34 percent of sales in fiscal 2013, compared with 51 percent from its auto unit. The Milwaukee-based company in January agreed to sell its automotive-electronics unit to Visteon Corp. and is considering options for its unprofitable auto-interiors unit, which makes door and instrument panels.
"This investment expands Johnson Controls' position in the buildings space with additional products that are complementary to our existing heating, ventilation and air conditioning offerings," JCI CEO Alex Molinaroli said in a statement.
Canada Pension acquired Air Distribution Technologies from engineering firm Tomkins for $1.1 billion in 2012.
Canada Pension paid $500 million in equity for the air business at that time and financed the rest with debt, Linda Sims, a spokeswoman, said in an e-mail. The sale to Johnson Controls would double the pension manager’s invested capital, she said.
The Air Distribution Technologies acquisition is expected to close by the end of July.Contact Automotive News