Johnson Controls to Seek Acquisitions, New CEO Says
Stock Chart for Johnson Controls Inc (JCI)
Johnson Controls Inc. (JCI), the largest U.S. automotive supplier, will seek acquisitions for its building efficiency unit, the company’s incoming chief executive officer said.
“It’s more than possible,” Alex Molinaroli, who takes the helm of the Milwaukee-based company on Oct. 1, said in an interview today. “I don’t think I’d be doing my job if it’s just possible.”
Molinaroli, a 30-year veteran of Johnson Controls, has served as vice chairman since January. He will succeed Stephen Roell, who will retire after holding the top position since 2007. Roell will remain as chairman until the end of the year. Molinaroli will assume that post on Jan. 1.
Acquisitions in the company’s automotive sector are possible and such moves would be “fairly narrow,” Molinaroli said. The business efficiency line is a more attractive investment in the near-term and the company’s automotive group is still “digesting” acquisitions, he said.
“I think that right now would be the wrong time to pile more on top of that team,” he said of automotive. The company in 2011 acquired C. Rob. Hammerstein Group, Keiper and Recaro Automotive in Europe.
Johnson Controls still plans to find a buyer for its automotive electronics business by the end of September, Molinaroli said. Last week, the company agreed to sell its HomeLink installed garage door business to Zeeland, Michigan-based Gentex Corp. (GNTX) for $700 million. Molinaroli said the rest of the line won’t be be split further.
The incoming CEO said he didn’t expect an immediate recovery for European auto sales, which have slumped to a two-decade low.
“We’re bumping along the bottom, and we will be bumping along the bottom for a while,” Molinaroli said.
Johnson Controls fell 0.8 percent to $40.89 at 12:21 p.m. New York time. The shares have gained 34 percent this year through yesterday, compared with a 19 percent rise in the Standard & Poor’s 500 Index.
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