(Adds details, background,)
By Euan Rocha
TORONTO, April 16 Johnson Controls Inc
said on Wednesday it will acquire Air Distribution Technologies
from Canada Pension Plan Investment Board (CPPIB) for $1.6
billion, in a move aimed at expanding its offerings in the
ventilation products segment.
Milwaukee, Wisconsin-based Johnson Controls, which makes car
interiors and batteries as well as heating, ventilation and
cooling systems for buildings, said the acquisition reflects its
commitment to invest in the buildings business as a growth
"This investment expands Johnson Controls' position in the
buildings space with additional products that are complementary
to our existing heating, ventilation and air conditioning
offerings," said the diversified manufacturer's Chief Executive
Alex Molinaroli, in a statement.
Canadian pension fund manager CPPIB had acquired
Dallas-based Air Distribution business from Tomkins in 2012 for
$1.1 billion, of which about $500 million was funded with equity
Upon closing of the proposed deal with Johnson Controls in
July, CPPIB expects to receive proceeds of about $1 billion.
The transaction comes just days after CPPIB and Canadian
private equity firm Onex Corp agreed to sell industrial
conglomerate Gates Corp to private equity firm Blackstone Group
LP for $5.4 billion.
Auto-parts and building-products maker Gates is a division
of Tomkins, which Onex and CPPIB jointly bought in 2010 for
about $5 billion. That sale is also expected to close later this
year, the companies said in early April.
CPPIB, one of Canada's top pension fund managers with more
than C$192.8 billion ($176 billion) in assets under management,
said the sale of Air Distribution Technologies remains subject
to customary closing conditions and regulatory approvals.
Johnson Controls was advised by Goldman Sachs on strategic
and financial aspects of the transaction, while Cleary Gottlieb
Steen & Hamilton acted as its as legal representatives.
($1 = 1.0979 Canadian Dollars)
(Additional reporting by Mridhula Raghavan in Bangalore;
Editing by Saumyadeb Chakrabarty and Alden Bentley)