Ingersoll-Rand to Spin Off Security Business
December 11, 2012
The board of directors at Ingersoll-Rand plc has approved a plan to spin off its commercial and residential security businesses, which include Schlage locks and numerous other hardware brands. The separation will result in two standalone companies: Ingersoll Rand, a combination of industrial, transport refrigeration, and heating, ventilation and air conditioning businesses; and the new security company, a global provider of electronic and mechanical security products and services.
The new company’s portfolio of brands will include Schlage, Nexia Home Intelligence, LCN, Von Duprin, Interflex, CISA, Briton, Bricard, Bocom Systems, Dexter, Kryptonite, Falcon and Fusion Hardware Group. Ingersoll Rand expects the spin-off, which is intended to be tax free to shareholders, to be completed in approximately 12 months.
“Given the distinct strengths and strategies of the two proposed companies, the board believes that this structure will enable investors to value our different businesses separately, creating value for both companies and their shareholders,” says Michael W. Lamach, Ingersoll Rand’s chairman and CEO. “We believe the spin-off, which is the result of an in-depth review of strategic alternatives by our board and management, will allow both companies to enhance value by allocating capital and deploying resources in a more focused way, while preserving and increasing synergies within their businesses. At the same time, it will position the new security company to build scale and make the necessary investments for the future."
The new company will have annualized revenue of about $2 billion, it is noted. Ingersoll-Rand, which will continue to include such brands as Trane, American Standard, Ameristar, Thermo King, Aro and Club Car, will have annual sales of about $12 billion.