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Woodcliff Lake”s Ingersoll-Rand today announced that it has signed a definitive agreement to expand its global climate control business by acquiring Hussmann International, a leading manufacturer of food-store equipment and commercial refrigeration products. Hussmann International designed the first meat display case in 1917 and the first frozen food case for Clarence Birdseye in 1933. The transaction is valued at approximately $1.83 billion, including the assumption of approximately $275 million of debt. Under terms of the agreement, which has been approved by the boards of directors of both companies, IR will pay $29.00 in cash for each of Hussmann”s approximately 50.6 million common shares and will redeem all outstanding Hussmann stock options. The agreement provides for an all-cash tender offer by a subsidiary of IR for all of Hussmann”s outstanding shares of common stock to commence within five business days. The tender is expected to close before June 30.

IR expects the acquisition to be immediately accretive to earnings per share by $0.02 to $0.05 for the year ending December 31, and by $0.15 to $0.20 in 2001, the first full year of combined operations. In addition, the company expects to achieve a return on invested capital of 15% from this transaction by 2004.

Based just outside of St. Louis in Bridgeton, Missouri, Hussmann International is involved in the design, production, installation and service of merchandising and refrigeration systems for the global food industry with 1999 sales of $1.3 billion. The company has a global presence with approximately 29% of its revenues generated outside the United States and Canada.

Herbert L. Henkel, Ingersoll-Rand chairman, president and chief executive officer, said, “On a combined basis, our climate control operations will have revenues of approximately $2.8 billion by 2001. We expect the profitable growth of this business to be enhanced as we realize cumulative operating synergies of more than $100 million by 2003. The expected synergies should include purchasing and procurement savings generated by increased volume and improvements in manufacturing, general and administrative costs. Also, we will quickly and cost-efficiently complete our planned international expansion in the climate control business by building on Hussmann”s existing worldwide manufacturing capabilities.
HOOVER”S ONLINE Company Capsule: Ingersoll-Rand