Ingersoll Rand announced Monday, July 30, that it has reached an agreement to sell its Bobcat, Utility Equipment and Attachments business units to Doosan Infracore for $4.9 billion.
The morning of the announcement, Ingersoll’s shares were up 5.1%, or $2.44, to $50.58.
Combined with the April sale of its road-development business, Ingersoll will have $6.2 billion of gross proceeds, and a long-term debt of less than $1 billion. The company will use the money to make acquisitions, finance new products and buy back shares, said Ingersoll chairman, president and chief executive officer Herbert L. Henkel.
Ingersoll announced in May that it was trying to get rid of homebuilding-equipment maker Bobcat, which is a division that has struggled during the U.S. housing slump. The division’s first-quarter revenues were down 12% from a year ago.
The sale, which is subject to customary closing conditions, is targeted to close early in the 2007 fourth quarter. The company said it should complete its transformation into an industrial company zeroed in on global climate control, industrial and security markets. Ingersoll, which is based in Bermuda, makes such products for businesses as supermarket refrigeration equipment, golf carts and locks.
“The sale of Bobcat, Utility Equipment and Attachments represents the last major action to transform our business portfolio to reposition Ingersoll Rand as a diversified industrial company,” Henkel said. “We remain focused on driving growth and creating shareholder value through three strategic platforms serving global climate control, industrial and security markets. I am confident that these businesses will deliver consistent financial performance over the long term and across all phases of the economic cycle.”