Johnson Controls to Sell Power Solutions Business to Brookfield Business Partners for $13.2 Billion -- Update

By Aisha Al-Muslim 

Johnson Controls International PLC has made a deal to sell its automotive battery business to Brookfield Business Partners L.P. and its partners for $13.2 billion in cash.

The deal for Johnson Controls' power solutions business announced Tuesday with Brookfield Business Partners, along with its partner Canadian pension fund company Caisse de dépôt et placement du Québec, doesn't include debt, a Johnson Controls spokesman said. The transaction is expected to close by June 30.

With the sale of the battery business, Johnson Controls, an industrial and technology conglomerate with headquarters in Cork, Ireland, will streamline its portfolio to focus on its buildings business, Chief Executive George Oliver said in prepared remarks.

In March, Johnson Controls hired investment bank Centerview Partners to help it explore strategic alternatives for the business.

Net cash proceeds from the deal are expected to be $11.4 billion after tax and transaction-related expenses. Johnson Controls expects to use $3 billion to $3.5 billion of the proceeds toward paying down debt and return the remainder to shareholders, the company said.

Johnson Controls' power solutions business, which is the world's largest maker of automotive batteries, generated $8 billion in revenue and $1.68 billion in earnings before interest, taxes, depreciation and amortization in the year ended Sept 30, 2018. The deal price is nearly eight times the trailing 12-month EBITDA.

Operating results of Johnson Controls' power solutions business will be reported in discontinued operations starting in the first fiscal quarter of 2019. The unit has 15,000 employees.

Brookfield Business Partners is a publicly listed vehicle through which Brookfield Asset Management owns and operates the business services and industrial assets acquired through its private-equity business.

Write to Aisha Al-Muslim at [e-mail]

(END) Dow Jones Newswires

November 13, 2018 10:09 ET (15:09 GMT)

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