Emerson Electric Offloads 55% Stake In Climate-Technologies Unit At $14B Valuation

  • Emerson Electric Co EMR is selling a majority stake in its climate-technologies business to Blackstone Inc BX, valuing the unit at $14 billion, including debt.
  • The deal could mark the biggest private-equity buyout in months when such activity is on a downward trend amid market volatility.
  • Wall Street Journal first reported the deal.
  • The standalone Climate Technologies business represents approximately $5.0 billion of fiscal 2022 sales.
  • The transaction would give Blackstone a 55% stake in the unit, which sells compressors and other HVAC products and services used in commercial and residential heating & cooling and cold storage.
  • Emerson will receive upfront, pre-tax cash proceeds of approximately $9.5 billion and a note of $2.25 billion and retain a 45% stake.
  • Blackstone and its co-investors would contribute $4.4 billion in equity toward the deal, supplemented by $5.5 billion of debt financing. 
  • Joseph Baratta, global head of private equity at Blackstone, said its ability to get the deal done illustrates the firm’s competitive advantage as a trusted counterparty for an array of lenders.
  • “I think it will take at least six months for the credit market to normalize, and we will continue to transact in this market,” he said. “We like to invest in these moments. This is when you can do interesting things.”
  • Bloomberg reported this month that Emerson was in talks with Blackstone about a deal involving its commercial and residential business.
  • Price Action: EMR shares are up 0.24% at $87.60 during the premarket session on the last check Monday.
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