The Manitowoc Company agreed to sell Kysor/Warren to Lennox International for approximately $138 million.
The sale includes the Kysor/Warren refrigerated display merchandisers manufacturing business in Columbus, GA as well as Kysor/Warren de Mexico. Kysor/Warren had been one of many brands in the Manitowoc commercial foodservice equipment business.
"Refrigeration is a core business for us with solid long-term performance," said Todd Bluedorn, CEO of HVAC/R producer Lennox International. He said the Kysor/Warren acquisition supports the Lennox growth strategy in the refrigeration market and extends the value chain to food retail and supermarket customers. "Our refrigeration subsystems combined with Kysor/Warren's systems and display cases will enable us to provide complete refrigeration solutions utilizing the most advanced technologies to maximize energy efficiency for our customers. We will drive operational synergies in the combined business and expect the acquisition to be accretive within the first year. We still expect our Refrigeration segment margin to be in the 12-14% range for 2012."
Lennox International's refrigeration segment revenue – 18% of total company revenue - was up 11% and segment profit was up 44% for the first nine months of 2010 over the prior year. Refrigeration segment revenue was $513 million for 2009 and is expected to be approximately $560 million for 2010. Kysor/Warren had $145 million in revenue for 2009, and 2010 revenue will exceed $190 million.
"This divestiture will allow us to intensify the focus on our strategic imperatives including greater innovation around our core brands, improving operational efficiencies across our global footprint, and driving organic growth opportunities," said Glen E. Tellock, Manitowoc's chairman and CEO. Manitowoc will use the net proceeds of approximately $100 million from this sale to further reduce its secured debt and financial leverage.
The transaction is expected to close in the first quarter of 2011
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