Ingersoll-Rand Sells One Division, Acquires Another

Researched by Industrial Info Resources (Sugar Land, Texas)-- Ingersoll-Rand Company Limited (NYSE:IR) (Hamilton, Bermuda) has entered an agreement to purchase Trane Incorporated (Piscataway, New Jersey), a manufacturer of indoor climate control systems for nearly $10.1 billion, including $150 million of Trane debt. The acquisition will be paid for with cash and stock. Trane's 2007 annual revenues are expected to approximate $7.4 billion. Trane has more than 29,000 employees and 29 production facilities worldwide.

The acquisition has already been approved by the boards of both companies and is expected to close in the late first quarter of 2008. The transaction is still subject to approval by Trane shareholders, regulatory approvals and customary closing conditions.

After the acquisition, Ingersoll-Rand expects its climate control business to generate $11 billion in revenue in 2008. The deal complements Ingersoll-Rand's position as one of the world's largest manufacturers of refrigeration and air solutions. The company has limited presence in air conditioning. The deal will give Ingersoll-Rand access to Trane's building and transportation cooling systems. Ingersoll-Rand Chief Executive Herbert Henkel said: "Based upon market fundamentals such as rising energy costs and conservation initiatives, we expect solid replacement demand for energy-efficient products and for retrofit and refurbishment of current systems. Trane's large installed base of equipment and systems will provide profitable aftermarket growth potential."

Ingersoll-Rand is a $17 billion global diversified industrial company with strong market positions in the climate control, industrial and security markets. Ingersoll-Rand recently sold its Bobcat, Utility Equipment and Attachments business units to Doosan Infracore of Seoul, South Korea, for $4.9 billion. The deal was completed in November 2007. Bobcat manufactures and sells compact equipment, including skid-steer loaders, compact track loaders, mini-excavators and telescopic tool handlers; portable air compressors, generators, and light towers; general-purpose light construction equipment; and attachments.

In 2006 Bobcat generated approximately $2.6 billion in revenues and employed approximately 5,700 people worldwide. The sale includes five manufacturing plants in the U.S. as well as plants in China, Czech Republic, France, Ireland and Wales.

Doosan Infracore operates several sales and technical service centers plus a parts distribution center in the United States, but the former Bobcat plants will be the company's first U.S. manufacturing operations.

In 2005, Doosan Heavy Industries & Machinery Limited purchased the controlling interest of Daewoo Heavy Industries & Machinery Limited in Seoul. The name of the entity was changed to Doosan Infracore America Corporation. Doosan Infracore, an affiliate of the Doosan Group, was established in 1937 and specializes in construction equipment, industrial vehicles, defense product manufacturing, and machine and diesel systems. Doosan Infracore is Korea's largest manufacturer of construction machinery. Doosan Infracore employs approximately 5,000 people and now has 20 plants worldwide.

Upon completion of the sale, Ingersoll-Rand said it would use the proceeds of the sale to fund innovation and new-product development efforts as well as to make acquisitions that enhance its strategic business platforms. With the acquisition of Trane Incorporated, it looks like the company is well on its way.

Industrial Info Resources (IIR) is the leading marketing information services company for the industrial process, heavy manufacturing and energy-related markets throughout the world. Celebrating its 25th anniversary, IIR provides accurate and timely intelligence featuring plant and project information databases, focused market databases, industry forecasting, key industry contacts, industry and territorial map products, direct marketing services and applications, and daily industry news.