Ingersoll Rand Inc., a global provider of mission-critical flow creation and industrial solutions, has entered into an agreement to sell a majority interest in its High Pressure Solutions (HPS) Segment to the private equity firm American Industrial Partners (AIP).
Ingersoll Rand will receive cash proceeds of approximately US$300 million at closing for its majority interest and will retain a 45% common equity interest in the business. The transaction, subject to standard closing conditions, is expected to be completed in the 1H21.
“Today’s transaction is a meaningful step forward in our transformation and achieves many of the goals we have previously communicated,” said Vicente Reynal, Chief Executive Officer of Ingersoll Rand. “It significantly reduces our direct exposure to the upstream oil and gas market to non-material revenue exposure of <2%, and accelerates our ESG commitments. We are pleased to achieve an attractive valuation for our shareholders with the opportunity to continue to benefit from future economic upside, and secure significant upfront cash that we will use to support growth. After a successful year during 2020 despite the pandemic, we now enter the next phase of our journey with a portfolio focused on core, higher-growth, sustainability-oriented industrial markets, including water, life sciences, and renewable energy, supported by strong secular trends.”
Ingersoll Rand selected AIP due to the firm’s successful track record in carve-out transactions, deep experience in the industrial economy, including HPS’s end markets, and its emphasis on engineering and operational excellence.
“High Pressure Solutions has an outstanding reputation, a history of innovation, a focus on serving its customers and a talented workforce,” said Alex Menkhaus, a partner at AIP. “We are excited to partner with the HPS team to continue to provide our customers with leading technology, quality and service.”
Simmons Energy, a division of Piper Sandler & Co., is serving as exclusive financial advisor to Ingersoll Rand, Citi is serving as special advisor and Kirkland & Ellis LLP is serving as legal counsel.
For more news and technical articles from the oil and gas pipeline industry, read the latest issue of World Pipelines magazine.
The February 2021 issue of World Pipelines includes: a report on Australasian pipelines; an interesting look at the need to protect pipeline information from the Freedom of Information Act (USA); analysis of Ukraine’s place in the global gas sector; and technical articles on subsea repair, coatings, ILI and SCADA systems.
Read the article online at: https://www.worldpipelines.com/special-reports/17022021/aip-acquires-majority-interest-in-ingersoll-rands-hps-segment/