Onex Corporation and Canada Pension Plan Investment Board (CPPIB) have agreed to acquire the Air Distribution division of Tomkins for approximately $1.1 billion. The closing of the transaction is expected to occur in the fourth quarter of 2012.
Tomkins’ Air Distribution division is a North American manufacturer of grills, register and diffusers (GRDs), terminal units, fire and smoke dampers, louvers, filters and fans that are used to distribute, recycle and vent air in HVAC systems used in non-residential and residential buildings. Brands include Titus, Krueger, Ruskin and Hart & Cooley. Revenues for the most recent year were $884 million and adjusted EBITDA was $104 million (www.hartandcooley.com).
“The Air Distribution division is a market leader in its industry with a premier product portfolio and strong distribution network, and is well positioned for growth,” said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. “Through our joint ownership of Tomkins since 2010, we have acquired deep knowledge of the Air Distribution business and have built strong relationships with management. With this acquisition, we will acquire directly a significant majority interest in the Air Distribution division, including the portion that we don’t currently own indirectly through Tomkins. We look forward to our continued strong partnership with the Air Distribution division’s management team to drive the next phase of development for the business.”
In 2010, Onex and CPPIB jointly acquired Tomkins, an industrial holding company that operates a number of businesses serving the general industrial, automotive and construction markets around the globe. Its core business, Gates, is a manufacturer of power transmission belts and hydraulic hoses for the industrial and automotive aftermarket. Since acquisition, Tomkins has sold five non-core businesses for total proceeds of almost $1 billion, which were primarily used to reduce the company’s debt.
Credit Suisse and BofA Merrill Lynch served as financial advisors to Tomkins and the air distribution subsidiaries involved in the transaction.
Onex Corporation makes private equity investments through the Onex Partners and the ONCAP families of funds. The firm invests in small and mid-sized North American businesses with enterprise values from $50 million to $500 million. Onex has more than $15 billion of assets under management and is based in Toronto (www.onex.com).
The Canada Pension Plan Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. The board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. The company is headquartered in Toronto, with offices in London and Hong Kong (www.cppib.ca).
© 2012 PEPD • Private Equity’s Leading News Magazine • 9-21-12