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Ingersoll Rand to Enhance Shareholder and Company Value Through Two Major Initiatives



  Ingersoll Rand to Enhance Shareholder and Company Value Through Two Major
  Initiatives

Plans Tax-Free Spin-Off of Combined Commercial and Residential Security
Businesses to Shareholders

  * Commercial and residential security businesses will be combined to form a
    new standalone global company
  * Ingersoll Rand to continue as a global leader in creating comfortable,
    sustainable and efficient environments

Company to Revise Capital Structure and Allocation Strategy to Return
Additional Capital to Shareholders and Enhance Total Shareholder Return

  * Increase overall debt and leverage ratio while maintaining solid
    investment grade rating
  * New $2 billion share repurchase program
  * 31 percent increase in quarterly dividend to 21 cents per ordinary share

Business Wire

SWORDS, Ireland -- December 10, 2012

Ingersoll-Rand plc (NYSE:IR) today announced that its Board of Directors has
unanimously approved a plan to spin off its commercial and residential
security businesses (the “new security” company). The separation will result
in two standalone companies: Ingersoll Rand, a world leader in creating
comfortable, sustainable and efficient environments through its industrial,
transport refrigeration, and heating, ventilation and air conditioning (HVAC)
businesses; and the new security company, a leading global provider of
electronic and mechanical security products and services, delivering
comprehensive solutions to commercial and residential customers. Ingersoll
Rand expects the spin-off, which is intended to be tax free to shareholders,
to be completed in approximately 12 months.

“Given the distinct strengths and strategies of the two proposed companies,
the Board believes that this structure will enable investors to value our
different businesses separately, creating value for both companies and their
shareholders,” said Michael W. Lamach, Ingersoll Rand’s chairman and chief
executive officer. “We believe the spin-off, which is the result of an
in-depth review of strategic alternatives by our Board and management, will
allow both companies to enhance value by allocating capital and deploying
resources in a more focused way, while preserving and increasing synergies
within their businesses. At the same time, it will position the new security
company to build scale and make the necessary investments for the future.

“The new proposed standalone companies will leverage leading market positions,
well-known brands and experienced people. We believe both companies will be
well positioned to better execute their respective strategic plans to
capitalize on future market opportunities, serve customers, create sustainable
growth, and enhance shareholder value,” said Lamach, who will continue after
the spin-off to serve in his current role as Ingersoll Rand’s chairman and
chief executive officer.

Two Industry-Leading Companies with Distinct Strengths and Focus

About Ingersoll Rand

Ingersoll Rand will continue to build on its industrial, transport
refrigeration and HVAC businesses. The company will serve customers globally
through a number of leading brands, including Ingersoll Rand, Trane, American
Standard, Ameristar, Thermo King, Aro and Club Car.

Following the separation, the company will have annualized revenue of
approximately

$12 billion on a pro forma basis based on 2011 revenues. The company is
expected to maintain a strong balance sheet and financial policies consistent
with an investment grade credit rating.

Ingersoll Rand benefits from strong brand recognition, leading market shares,
and differentiated positioning in geographic and end markets. The company will
continue to enjoy benefits from synergistic opportunities in sourcing,
engineering and technology across its Industrial Technologies, Climate
Solutions and Residential HVAC businesses. Moreover, the company expects to
benefit from increased organizational focus and continued progress on
operational excellence initiatives to drive significant margin improvement.
These foundational strengths, combined with growing energy demand and
energy-efficiency regulations that are driving industry transformation, will
further position the company to generate profitable, sustainable growth.

About New Security Company

Under the plan, Ingersoll Rand’s existing commercial security business
(currently known as the Security Technologies sector) will be combined with
its residential security business (currently part of the Residential Solutions
sector) to form a leading global safety product and services provider. This
new company’s portfolio of brands will include Schlage, LCN, Von Duprin,
Interflex, CISA, Briton, Bricard, BOCOM Systems, Dexter, Kryptonite, Falcon
and Fusion Hardware Group.

The new company will have annualized revenue of approximately $2 billion on a
pro forma basis based on 2011 revenues. The new security company is expected
to generate strong free-cash flow and have the financial flexibility to take
advantage of future growth opportunities.

The new security company is also expected to have strong margins, as well as
strong brand recognition and market-leading products and solutions, to set a
solid foundation for future growth. The company will benefit from synergies in
sourcing, technology, and assembly operations across the residential and
commercial security markets. It also will have the opportunity to invest in
key markets to take advantage of growing trends around increased security
concerns, electronics connectivity, product life-cycle costs and rapid demand
growth in emerging markets.

Transaction Information

Execution of the transaction requires further work on structure, management,
governance and other significant matters. Management is developing detailed
plans for the Board’s further consideration and approval. The leadership team
of the new security company will be announced prior to the completion of the
spin-off. Upon completion of the spin-off, Ingersoll-Rand plc will cease to
have any ownership interest in the new security company, and the new security
company will become an independent publicly traded company. The new security
company is anticipated to be an Irish plc.

The completion of the spin-off is subject to certain customary conditions,
including receipt of regulatory approvals, receipt of a ruling from the U.S.
Internal Revenue Service as to the tax-free nature of the spin-off, as well as
certain other matters relating to the spin-off, receipt of legal opinions,
execution of intercompany agreements, effectiveness of appropriate filings
with the U.S. Securities and Exchange Commission, and final approval of the
transactions contemplated by the spin-off, as may be required under Irish law.
The company noted that there can be no assurance that any separation
transaction will ultimately occur, or, if one does occur, its terms or timing.

Shareholder-Focused Capital Structure and Allocation Strategy

Ingersoll Rand also announced a revised capital structure and allocation
strategy designed to improve efficiency and return additional capital to
shareholders through the following actions authorized by the Board of
Directors:

  * An increase in the level of overall indebtedness and leverage ratio while
    still preserving a solid investment grade credit rating.
  * A new share repurchase program of up to $2 billion of the company’s
    ordinary shares. The share repurchase program will begin in 2013, with an
    expected completion in the first quarter of 2014. The timing of the
    program will be dependent on the company’s access to the capital markets,
    available liquidity and cash flow, and general market conditions. The
    repurchase program may be executed through various methods, including open
    market repurchases.
  * The declaration of a quarterly dividend of 21 cents per ordinary share,
    reflecting an increase of 31 percent. The dividend is payable March 28,
    2013, to shareholders of

record on March 12, 2013. Upon completion of the transaction, Ingersoll Rand
and the new security company are initially expected to pay a combined
quarterly dividend approximately equal in sum to the Ingersoll Rand dividend
at the time of the closing.

Lamach said, “Over the past several years, we have generated substantial free
cash flow, even through tough economic times. Our outlook has not changed in
this regard. This prudent and revised capital structure and allocation
strategy will accelerate our efforts to continue to deliver attractive returns
for our shareholders while maintaining a strong balance sheet to fund future
investments and growth.”

Investor Conference Call

Michael W. Lamach and Steven R. Shawley, senior vice president and chief
financial officer, will hold a conference call for investors today at 10:30
a.m. Eastern Standard Time to outline the proposed spin-off and answer
questions. The call can be accessed via the company’s web site:
www.ingersollrand.com. Presentation materials will be available on the web
site prior to the call.

Forward-Looking Statements

This news release includes “forward-looking statements,” which are statements
that are not historical facts, including, but not limited to, statements that
relate to our intent to create two independent companies as a result of the
proposed spin-off, the potential and opportunities for the independent
companies following the spin-off, the expected benefits of the proposed
spin-off, the tax-free nature of the proposed spin-off, the expected credit
profiles of the independent companies, the timing of the transaction and our
capital structure and allocation. The forward-looking statements in this news
release are based on current expectations and assumptions that are subject to
risks and uncertainties, many of which are outside of our control, and could
cause results to materially differ from expectations. Such risks and
uncertainties, include, but are not limited to: our ability to timely obtain,
if ever, necessary regulatory approvals or to satisfy any of the other
conditions to the proposed spin-off; adverse effects on the market price of
our ordinary shares and on our operating results because of our inability to
timely complete, if ever, the proposed spin-off; our ability to fully realize
the expected benefits of the proposed spin-off; negative effects of
announcement or consummation of the proposed spin-off on the market price of
the company’s ordinary shares; significant transaction costs and/or unknown
liabilities; general economic and business conditions that affect the
companies in connection with the proposed spin-off; unanticipated expenses
such as litigation or legal settlement expenses; failure to obtain tax rulings
or tax law changes; changes in capital market conditions; the impact of the
proposed spin-off on the company’s employees, customers and suppliers; future
opportunities that the company’s board may determine present greater potential
to increase shareholder value; and the ability of the companies to operate
independently following the spin-off. Actual results could differ materially.
For further information regarding risks and uncertainties associated with our
businesses, please refer to our Form 10-K for the year ended December 31,
2011, Form 10-Q for the quarter ended September 30, 2012, and in our other SEC
filings. We assume no obligation to update these forward-looking statements.

About Ingersoll Rand

Ingersoll Rand (NYSE:IR) advances the quality of life by creating and
sustaining safe, comfortable and efficient environments. Our people and our
family of brands—including Club Car®, Ingersoll Rand®, Schlage®, Thermo King®
and Trane® —work together to enhance the quality and comfort of air in homes
and buildings; transport and protect food and perishables; secure homes and
commercial properties; and increase industrial productivity and efficiency. We
are a $14 billion global business committed to a world of sustainable progress
and enduring results. For more information, visit ingersollrand.com.

Contact:

Ingersoll-Rand plc
Media:
Misty Zelent, 704-655-5324
mzelent@irco.com
or
Analysts:
Joe Fimbianti, 704-655-4721
joseph_fimbianti@irco.com
or
Janet Pfeffer, 704-655-5319
janet_pfeffer@irco.com
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