UPDATE 2-CPPIB buys Tomkins' HVAC business for $1.1 bln
* Tomkins continues to sell non-core units
* Deal to close in fourth quarter
TORONTO, Sept 21 (Reuters) - The Canada Pension Plan Investment Board (CPPIB) said on Friday it will pay $1.1 billion for the heating and air conditioning business of Tomkins Ltd , a British-based industrial holdings company jointly owned by CPPIB and Onex Corp.
Canadian private equity firm Onex and CPPIB, which manages one of the world's largest pension funds, acquired Tomkins in 2010, and the company has since reduced its debt by selling five non-core businesses for total proceeds of almost $1 billion.
"With this acquisition, we will acquire directly a significant majority interest in (Tomkins') air distribution division, including the portion that we don't currently own indirectly through Tomkins," Andre Bourbonnais, CPPIB's senior vice president of private investments, said in a statement.
The division is a North American manufacturer of residential and non-residential heating, venting and air conditioning (HVAC) products.
Onex said the sale of the Tomkins unit puts its disposition program ahead of schedule. It said it can now concentrate on Tomkins' core business, Gates Corp, a manufacturer of power transmission belts and hydraulic hoses for the industrial and automotive aftermarkets.
"We can now focus our efforts on building value in the core Gates business with a significantly de-levered capital structure," Onex Managing Director Seth Mersky said in a statement.
The HVAC unit deal is expected to close in the fourth quarter of this year.