- Emerson Electric Co EMR sells a majority stake in its climate technology business Blackstone Inc BXvalues the unit at $14 billion, including debt.
- The deal could be the largest private equity buyout in months, when such activity has trended downward amid market volatility.
- Wall Street Journal First reported the deal.
- Climate Technologies’ standalone 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 systems.
- Emerson will receive approximately $9.5 billion in pre-tax cash proceeds and $2.25 billion in promissory notes retain a 45% stake.
- Blackstone and its co-investors would contribute $4.4 billion in equity to the transaction, supplemented by $5.5 billion in debt financing.
- Joseph Baratta, Blackstone’s global head of private equity, said the ability to close the deal demonstrates the company’s competitive advantage as a trusted counterparty to a range of lenders.
- “I think it will take at least six months for the credit market to normalize and we will continue to do business in that market,” he said. “We like to invest in these moments. You can do interesting things there.”
- Bloomberg reported this month that Emerson was in talks with Blackstone over a deal that would include its commercial and residential businesses.
- Price promotion: EMR shares are up 0.24% to $87.60 during the premarket session on last check Monday.
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