Brookfield Area Partners of Toronto and the Caisse de dépôt et placement du Québec, based in Montreal, together with a batch of institutional partners, have signed a deal to buy Johnson Controls’ power dissolves business for $13.2 billion US.
The business produces batteries for automakers and aftermarket distributors and retailers.
The circles say it is well positioned to benefit from the growth in demand for advanced batteries, numbering those used in electric vehicles.
“We are excited to grow our business with the acquirement of power solutions, a global market leader which generates harmonious cash flows and profitability,” said Cyrus Madon, chief administrative of Brookfield Business Partners.
“We look forward to partnering with the administration team to continue growing this world-class business and build on its catch record of innovation.”
George Oliver, Johnson Controls chairman and chief numero uno, said the deal was a significant milestone in the ongoing transformation of the company.
“The selling of our power solutions business will create value for investors by streamlining our portfolio and disclosing us increased financial flexibility to strengthen our balance sheet, return wherewithal to shareholders and create optionality in our buildings business,” Oliver said in a account.
Johnson Controls expects net cash proceeds from the deal to be $11.4 billion US after tax and transaction-related expenses.
It expects to use $3 billion to $3.5 billion to reward debt.
The transaction will be funded with approximately $3 billion of even-handedness and about $10.2 billion of long-term debt financing.
Brookfield Work Partners, the main business services and industrials company of Brookfield Asset Managing Inc., expects to fund approximately 30 per cent of the equity, while CDPQ wishes fund about 30 per cent. The balance is being funded by other institutional associates.
The deal is expected to close by June 30, 2019.