Ingersoll-Rand Gets Buyer Interest in Power Tools Unit

(Bloomberg) -- Ingersoll-Rand Plc, the maker of commercial heating and air-conditioning systems, has recently received takeover interest in its power tools business, which could be worth up to $750 million in a potential sale, according to people familiar with the matter.

The Davidson, North Carolina-based company has been approached by potential buyers from Asia for the division, said one of the people, who asked not to be identified because the matter isn’t public. Ingersoll-Rand rebuffed their overtures, this person said.

The company explored selling the business last year, but abandoned the efforts after bids came in too low, the people said. Ingersoll-Rand hasn’t decided whether to reboot that process, one of the people said.

A representative for Ingersoll-Rand declined to comment.

The unit, which makes drills, jackhammers, riveters and other professional grade tools, generates about $75 million in annual earnings before interest, taxes, depreciation and amortization, one of the people said.

The approach comes as industrial conglomerates including General Electric Co., Johnson Controls International Plc and United Technologies Corp. are unloading business lines to focus on their strongest products with the best growth potential.

Ingersoll-Rand has been making acquisitions to build up its climate division, which sells various temperature and energy management products. That unit generated close to 80 percent of Ingersoll-Rand’s net sales last year and the company is relying on it to deliver most of its future growth, according to regulatory filings and investor presentations.

Power tools is one of more than two dozen businesses within its much-smaller industrial segment, which generated about 20 percent of net sales last year, according to its annual report.

While construction tools are a tiny part of the modern Ingersoll-Rand, they’ve played a huge role in its 147-year-old corporate history. Founder Simon Ingersoll invented a mechanized rock-drill that revolutionized mining and construction. The company’s early power tools were also used to carve Mount Rushmore and build Hoover Damn, according to its website.

Ingersoll-Rand divested its minority stake in refrigeration firm Hussman Corp. in 2016. In 2013, it spun-off security systems maker Allegion Plc, after hedge-fund manager Nelson Peltz pressured the company to break up.

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