Emerson Electric will sell a majority stake in its Cimate Technologies unit to Blackstone in a $14 billion deal, as the U.S. industrial firm shifts its focus to supplying a thriving automation market. The company said on Monday that it will receive an upfront payment of about $9.5 billion, which it will use to acquire more companies, particularly in the automation sector.
Whirlpool Corp bought the company’s waste disposal and hot water dispenser divisions, and it merged its software divisions with smaller rival Aspen Technology. Emerson, which will retain approximately 45 per cent of the climate tech unit, announced that Blackstone and co-investors Abu Dhabi Investment Authority and Singapore state fund GIC would contribute $4.4 billion in equity to the deal, which would be supplemented by $5.5 billion in debt financing.
The transaction, which is expected to close in the first half of 2023, is the latest in a flurry of private equity transactions this year as equities fell on recession fears, hammering valuations.
In fiscal 2022, the Climate Technologies business, which will be structured as a joint venture, generated net sales of $5 billion. Emerson receives financial advice from Centerview Partners and Goldman Sachs, while Blackstone receives advice from Barclays.
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