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Johnson Controls to Acquire York
MILWAUKEE, WISCONSIN, and YORK, PENNSYLVANIA - Johnson Controls, Inc. (NYSE: JCI) and York International Corporation (NYSE: YRK) announced that Johnson Controls will acquire York, a global supplier of heating, ventilating, air-conditioning and refrigeration (HVAC&R) equipment and services.
York, with estimated sales of nearly $5 billion, will become part of the nearly $6 billion Controls Group of Johnson Controls. The combination of the Controls Group and York is expected to increase Johnson Controls rate of growth in the $200 billion industry for global building environments. Johnson Controls fiscal 2005 consolidated sales from continuing operations, including its automotive seating/interiors and battery businesses, are forecast at nearly $28 billion.
Under the definitive agreement unanimously approved by the Boards of Directors of both companies, Johnson Controls will acquire York in an all-cash transaction in which York shareholders will receive $56.50 for each outstanding share of York common stock. The total value of the acquisition is anticipated to be approximately $3.2 billion, including the assumption of approximately $800 million of York debt. Johnson Controls expects to finance the transaction with short and long-term borrowings.
The transaction is expected to be modestly accretive to Johnson Controls earnings per share in fiscal 2006. Over $275 million of annual synergies, primarily related to cost efficiencies and a lower effective tax rate, are anticipated to be achieved by 2008.
The combination of York, a leader in the manufacturing and service of heating and cooling equipment, with Johnson Controls, an industry leader in the technologies which control that equipment, is a natural and strategic growth opportunity.
As a result of the combination, Johnson Controls
- Design and sell integrated controls and HVAC&R equipment;
- Become the largest global provider to the high-margin building services market; and
- Capitalize on significant opportunities to supply products and services to each other's
In addition, Johnson Controls global market reach will be enhanced, as the businesses collectively serve customers from over 500 sales and service offices and reach more than 125 countries. The two companies are market leaders in North America and Europe, and have complementary operations in the faster growing regions of Asia (especially China), Central Europe, the Middle East and Latin America.
For more information visit www.jci.com
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