"Combining Trane and Ingersoll Rand's climate control operation creates a very strong business," Poses said. "With the size, strength and operational effectiveness of a $17 billion global industrial company, we believe this combination is best for our customers, employees and shareowners in the long term." Businessman Fred Poses, the President of American Standard Co., served as a Peace Corps Volunteer in Peru in the 1960's.
Ingersoll Rand Buys Fred Poses' Trane For $10.1 Billion
Ingersoll Rand Buys Trane For $10.1 Billion
By GREG JUNEK
Business Editor
Ingersoll Rand Co. Ltd.'s acquisition of Trane Inc., could be a positive development for Trane Residential Systems in Tyler, officials from both companies said.
"All that I see in the future is further opportunity for growth as opposed to anything else," said Dave Pannier, president of Residential Systems.
The Hamilton, Bermuda-based Ingersoll Rand will purchase Trane for approximately $10.1 billion in cash and stock, the companies said Monday. Ingersoll Rand's U.S. executive offices are in Montvale, N.J.
Trane stock closed up $8.04, or 21.61 percent, to $45.24 on Monday. Ingersoll Rand stock dipped $5.58, or 11.35 percent, to close at $43.60.
Trane, based in Piscataway, N.J., has more than 29,000 employees and 29 production facilities worldwide. Its 2007 annual revenues are expected to approximate $7.4 billion. Ingersoll Rand's 2007 annual revenues are projected to be approximately $8.7 billion. The company has 35,000 employees and 80 manufacturing facilities worldwide.
An Ingersoll Rand spokesman also said employees of the Tyler Trane operations will not be immediately affected by the acquisition.
"It's premature to talk about any specific integration plans, but I think for the most part it's going to be business as usual for most employees and locations," said the spokesman, Paul Dickard.
The Tyler plant has approximately 2,200 employees, with about 1,600 production employees and about 600 salaried employees, Pannier said.
Tyler is Residential Systems headquarters for Trane and American Standard. It opened in July 1956, as a General Electric air conditioner plant. Trane purchased the business in 1982, and became a division of American Standard in 1984.
This year, American Standard Companies Inc. separated its three businesses - the other two were bath and kitchen and vehicle controls - and retained its air-conditioning systems and services business, changing the name to Trane. It continued to make air conditioning systems bearing the Trane and American Standard names.
"Ingersoll Rand is a large, successful, global business, and they're really complimentary to Trane," Pannier said, adding the acquisition should open an opportunity for the companies to share technologies.
"In that context, it's a matter of us to share in our relative expertise, to make each other better," he said.
Also, Trane commercial and residential air conditioning will bring about $7.4 billion in annual revenue to Ingersoll Rand, said Herbert L. Henkel, Ingersoll Rand chairman, president and chief executive officer.
"The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with projected pro forma 2008 revenues of $17 billion," Henkel said.
Tom Mullins, Tyler Economic Development Council president and chief executive officer, echoed Pannier on many points. Mullins said the acquisition could be good for the Tyler operation because it would boost Ingersoll Rand's position in the climate control business.
Ingersoll Rand's products include air compressors, climate control equipment, tools, locks and larger-scale security integration projects. Its Thermo King business builds climate control equipment for cargo areas of trucks, and its Hussmann business manufactures refrigerated grocery display cases.
"It does not appear that Ingersoll Rand is in this current portion of the climate control business," Mullins said. "They are in refrigerated transport and display cases, but residential air conditioning does not seem to be part of their product line now."
Ingersoll Rand also has a large worldwide network to market and distribute, Mullins said.
"Potentially, this could be a real stimulus for growth in operations of Trane in Tyler," he said.
Ingersoll Rand will acquire all outstanding common stock of Trane. Holders of Trane's approximately 200 million common shares will receive a combination of $36.50 in cash and 0.23 Ingersoll Rand shares of common stock per each Trane share, the companies said.
The total value for this transaction was $47.81 per Trane share based on the closing price on Friday. The companies anticipate the transaction to close late in the first quarter or early in the second quarter 2008, and it is subject to approval by Trane shareholders and regulatory parties.
Fred Poses, Trane chairman and CEO said, the offer represents an attractive price for its shareholders.
"Combining Trane and Ingersoll Rand's climate control operation creates a very strong business," Poses said. "With the size, strength and operational effectiveness of a $17 billion global industrial company, we believe this combination is best for our customers, employees and shareowners in the long term."
Poses will remain in his position until the acquisition is completed.
The Tyler operation gained tax abatements this year for the addition of a research and testing laboratory. Pannier said work is continuing on this project and he hopes it will be operational early in the second quarter of 2008.
