ABB to Divest Thomas & Betts' HVAC Biz - Analyst Blog

A generic image of a person holding out their hands
Credit: Shutterstock photo

Recently, ABB Ltd. ( ABB ) announced that its has signed an agreement to divest Thomas & Betts' heating, ventilation and air conditioning (HVAC) business to Nortek Inc. ( NTK ). 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 governmental buildings.

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 . ( PWR ) and Enersys Inc . ( ENS ), 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 Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More