With the credit crunch and the cooling of private equity, the M&A space has been fairly meager lately. But today, we got some good news (at least for deal junkies) -- Ingersoll-Rand (NYSE: IR) has agreed to pay $10.1 billion for Trane (NYSE: TT).
Ingersoll-Rand, founded in 1871, is a major diversified industrial company, with brands like Club Car golf cars, Hussmann stationary refrigeration equipment, and Schlage locks. And with the Trane deal, the company will boost its large climate control business, making it the number two player behind United Technologies.
Funny enough, it seems that Trane was trying to market itself to private equity buyers by selling off divisions and streamlining divisions. But of course, such a company can also be attractive to a strategic buyer, especially as global markets remain highly competitive.
With the Trane deal, Ingersoll-Rand will have $17 billion in revenues and $2 billion in EBIT (earnings before interest and taxes).
Yet Wall Street is a bit skeptical, with Ingersoll-Rand's stock price down 7%. Trane's stock, on the other hand, is up 23%.
Tom Taulli is the author of various books, including The Complete M&A Handbook
Reader Comments (Page 1 of 1)
12-17-2007 @ 5:35PM
peter benjamin said...
Deal flow is about to increase with smaller deals making their way to market. This is the goal of the feds to empower the entrepreneurs of our great country to become the next big companies. PE is great for the market but seed capital creates real wealth. No Risk no reward. We are seeking funding for Benteractive and its a shame that even with 100 million in potential revenue its difficult to find capital. M&A is dying what will replace it.