How Trane and American Standard were bought by
Written by Betty Stephens of Quest Media
Ingersoll-Rand Company Limited (Ireland based company) acquired Trane Inc. formerly American Standard Companies Inc., in a transaction valued at approximately $10.1 billion, including transaction fees and the assumption of approximately $150 million of Trane net debt. Trane was a global leader in indoor climate control systems, services and solutions with revenues of $7.4 billion.
Under the terms of the merger agreement, which was approved by the Boards of Directors of both companies, Ingersoll Rand acquired all outstanding common stock of Trane. Holders of Trane’s 200 million common shares received a combination of $36.50 in cash and 0.23 Ingersoll Rand shares of common stock per each Trane share. The total value for this transaction was $47.81 per Trane share based on the closing price as of December 14, 2007. The transaction closed in 2008.
The Ingersoll Rand portfolio now includes an $11 billion Climate Control business which can offer high value equipment, systems and services necessary for delivering solutions across the temperature spectrum for indoor, stationary, and transport applications worldwide.
This acquisition was a significant next step in Ingersoll Rand’s decade-long transformation to become a leading global diversified industrial company, with strong market positions across the climate control, industrial and security markets. It is expected that the acquisition of Trane meets will increase consistency of revenue and income streams, adding strong brands and market positions, and further strengthening the organic growth potential of our portfolio. Trane’s leadership position in the global commercial and residential climate control industry enhances Ingersoll’s highly regarded Hussmann and Thermo King Brands.
What Did The Trane Buy Out Offer Ingersoll-Rand?
Trane had a large installed base of equipment and systems that provided profitable aftermarket growth potential. Also, Trane was the leading company in the market in North America and was growing strongly and increasing its position in the international markets.
Trane Inc., previously named American Standard Companies Inc., provided systems and services that enhance the quality and comfort of the air in homes and buildings around the world. The company offered customers a broad range of energy-efficient heating, ventilation and air conditioning systems; dehumidifying and air cleaning products; service and parts support; advanced building controls; and financing solutions.
Trane’s systems and services were leading positions in premium commercial, residential, institutional and industrial markets; a reputation for reliability, high quality and product innovation; and a powerful distribution network. Trane had more than 29,000 employees and 29 production facilities worldwide.
In 1984, Trane was acquired by American Standard Inc., and became a fixture in the American Standard Companies business. Following a leveraged buyout in 1988, American Standard returned as a publicly held corporation in 1995.
On February 1, 2007, American Standard Companies announced it would break up its three divisions. The company sold off its namesake kitchen and bath division and spun off WABCO, American Standard’s vehicle controls division, while retaining The Trane Company. American Standard then renamed itself Trane Inc. effective November 28, 2007.
Ingersoll-Rand Inc. History
Ingersoll-Rand plc (NYSE: IR) is a global diversified industrial company founded in 1871. The Ingersoll Rand name came into use in 1905 through the combination of Ingersoll-Sergeant Drill Company and Rand Drill Company. Ingersoll-Rand was replaced by Quanta Services in June 2009 on the S&P 500 index. Ingersoll-Rand is currently listed on the S&P 500 index (as one of only 15 companies incorporated outside the U.S.) as it replaced Pactiv in November 2010. Its corporate headquarters are in the Airside Business Park in Swords, Fingal, County, Dublin, Ireland.
In 1871, Simon Ingersoll founded Ingersoll Rock Drill Company in New York. In 1905 Ingersoll-Sargeant Drill Company merged with the Rand Drill Company to form Ingersoll Rand. Ingersoll-Rand has largely grown by acquisition since that time. In October 2002, shareholders voted to move the company’s incorporation to Bermuda to capitalize on the savings on U.S. corporate income taxes on products sold overseas. Ingersoll Rand in March 2009 relocated their offices from Bermuda to Ireland. On June 4, 2010, Michael W. Lamach was elected Chairman of the company. He retained his current titles of President and Chief Executive Officer.
Ingersoll Rand’s corporate headquarters are in the Airside Business Park in Swords, Fingal, County Dublin, Ireland. Its North America headquarters are in Davidson, North Carolina, United States. Its European headquarters are in Sint-Stevens-Woluwe, Zaventem, Belgium. Its Asia headquarters are in Tower B of City Center of Shanghai in Shanghai, People’s Republic of China. Ingersoll-Rand now has a diverse and innovative products range from complete air compressor systems, air tools, ARO pumps, material handling systems and more. Ingersoll Rand provides products, services and solutions that enhance their customers’ energy efficiency, productivity and operations.
In 2011, Ingersoll Rand chose the Tyler, Texas plant as one of several Trane locations selected for downsizing. The number of job losses was expected to be 528 hourly positions, a figure that does not include salaried workers. The Tyler plant employed about 1,600 people.
Trane’s manufacturing plant in Fort Smith, AK, let go of 170 people in 2010.
A plant in Lynn Haven, FL. also cut 197 hourly and 15 salaried jobs by the end of last year. Other records show the company in 2009 cut more than 200 jobs at its Pueblo facility to reduce its workforce to about 435 people. The manufacturer of commercial air conditioning systems cut 270 jobs and transferred them to its plant in Monterrey, Mexico.