announced that its has signed an agreement to divest Thomas &
Betts' heating, ventilation and air conditioning (HVAC) business
). The deal is an all-cash transaction valued at $260 million and
is expected to close in the second quarter of 2014.
The strategic decision to divest the HVAC business has come
after a careful consideration through the continuous process of
portfolio optimization. Management at ABB believes that this
business had restricted synergies to the company's core
portfolio, proving it to be more of a drag for the company.
However, ABB intends to continue to supply its high efficiency
electrical motors and industry leading drives as well as its low
voltage products range to the HVAC industry.
In fiscal 2012, ABB had primarily acquired Thomas & Betts
to expand its reach in the Low Voltage Products segment across
key geographies such as, North America, Europe and Asia. The
combination of ABB's low-voltage protection, control and
measurement products with the electrical components business of
Thomas & Betts has created a broad portfolio of products.
On the other hand, the acquisition of the HVAC business is a
perfect fit for Nortek's existing line of heating and air
conditioning products. This Rhode Island-based company is a
leading manufacturer and marketer of remodeling and replacement,
residential and commercial new construction, manufactured housing
as well as personal and enterprise computer solutions.
This acquisition is likely to be integrated with the company's
Custom & Engineered Solutions segment which offers
custom-designed and engineered HVAC products and systems for
healthcare and educational facilities, commercial offices,
manufacturing facilities, clean rooms, data centers and
Following this divestiture, ABB intends to continue to focus
on its electrical business and cater to the approximately $24
billion potential North American market, that ABB acquired access
to after the purchase of Thomas & Betts.
ABB currently holds a Zacks Rank #4 (Sell). However, other
stocks which are worth considering at the moment are
Quanta Services, Inc
), both carry a Zacks Rank #2 (Buy).
ABB LTD-ADR (ABB): Free Stock Analysis Report
ENERSYS INC (ENS): Free Stock Analysis Report
NORTEK INC (NTK): Get Free Report
QUANTA SERVICES (PWR): Free Stock Analysis
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