Johnson Controls streamlines to Building Solutions with $13.2B sale

Cork, Ireland - Johnson Controls International plc has arrived at a definitive agreement to sell its Power Solutions business to Brookfield Business Partners L.P. together with institutional partners including Caisse de dépôt et placement du Québec in a cash transaction valued at $13.2 billion.

According to the company, net cash proceeds are expected to be $11.4 billion after tax and transaction-related expenses. The Company expects to deploy $3.0 to $3.5 billion of proceeds towards debt paydown and retain an investment grade credit rating. The remaining proceeds will be available to return to shareholders, with more specific details to be announced around the close of the transaction.

In fiscal 2018, Power Solutions generated $8.0 billion in revenue and $1.68 billion in earnings before interest, taxes, depreciation and amortisation. The transaction price of $13.2 billion represents a multiple of 7.9x trailing twelve month EBITDA.

The transaction is expected to close by June 30, 2019, subject to customary closing conditions and required regulatory approvals. Power Solution's operating results will be reported in discontinued operations beginning in the first fiscal quarter of 2019. Centerview Partners and Barclays served as financial advisors to Johnson Controls, and Simpson Thacher served as legal advisors.

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