Ingersoll Rand Inc., a global provider of mission-critical flow creation and industrial solutions, has entered into an agreement to sell a majority interest in its High Pressure Solutions (HPS) Segment to the private equity firm American Industrial Partners (AIP). Ingersoll Rand will receive cash proceeds of approximately $300 million at closing for its majority interest and will retain a 45% common equity interest in the business. The transaction, subject to standard closing conditions, is expected to be completed in the first half of 2021.
“Today’s transaction is a meaningful step forward in our transformation and achieves many of the goals we have previously communicated,” said Vicente Reynal, chief executive officer of Ingersoll Rand. “It significantly reduces our direct exposure to the upstream oil and gas market to non-material revenue exposure of <2%, and accelerates our ESG commitments. We are pleased to achieve an attractive valuation for our shareholders with the opportunity to continue to benefit from future economic upside, and secure significant upfront cash that we will use to support growth. After a successful year during 2020 despite the pandemic, we now enter the next phase of our journey with a portfolio focused on core, higher-growth, sustainability-oriented industrial markets, including water, life sciences, and renewable energy, supported by strong secular trends.”
Ingersoll Rand selected AIP due to the firm’s successful track record in carve-out transactions, deep experience in the industrial economy, including HPS’s end markets, and its emphasis on engineering and operational excellence. “High Pressure Solutions has an outstanding reputation, a history of innovation, a focus on serving its customers and a talented workforce,” said Alex Menkhaus, a partner at AIP. “We are excited to partner with the HPS team to continue to provide our customers with leading technology, quality and service.” Simmons Energy, a division of Piper Sandler & Co., is serving as exclusive financial advisor to Ingersoll Rand, Citi is serving as special advisor and Kirkland & Ellis LLP is serving as legal counsel.
About Ingersoll Rand Inc.
Ingersoll Rand Inc., driven by an entrepreneurial spirit and ownership mindset, is dedicated to helping make life better for our employees, customers and communities. Customers lean on us for our technology-driven excellence in mission-critical flow creation and industrial solutions across 40+ respected brands where our products and services excel in the most complex and harsh conditions. Our employees develop customers for life through their daily commitment to expertise, productivity and efficiency. For more information, visit www.IRCO.com.
About American Industrial Partners
American Industrial Partners is an operationally oriented private equity firm that makes control investments in industrial businesses serving domestic and global markets. The firm has deep roots in the industrial economy and has been active in private equity investing since 1989. To date, AIP has completed over 100 transactions and currently has more than $7 billion of assets under management on behalf of leading pension, endowment, and financial institutions. For more information on AIP, visit www.americanindustrial.com.