To receive net cash proceeds of 5.0 bln usd (Il Sole 24 Ore Radiocor) - Dublin, 23 Jul - Irish-based conglomerate Johnson Controls International (JCI) said it has reached an agreement to sell its Residential and Light Commercial (R&LC) HVAC business in an all-cash transaction to the German appliance group Bosch.

The transaction includes the North America Ducted business and global Residential joint venture with Hitachi, of which Johnson Controls owns 60% and Hitachi owns 40%.

JCI said the deal is worth an overall 8.1 billion dollars, with its portion of 6.7 billion reflecting approximately 4.6 billion for its North America Ducted business representing a multiple of 16.7x fiscal 2023 EBITDA and 2.1 billion for its interest in the Johnson Controls-Hitachi Air Conditioning joint venture representing a multiple of 7.5x fiscal 2023 EBITDA.

Net cash proceeds to Johnson Controls is expected to be approximately 5.0 billion after tax and transaction-related expenses, which will be used to pay down debt to the extent required to retain its investment grade rating with the remaining proceeds available to be returned to shareholders.

As part of the transaction, Hitachi will retain certain ductless HVAC assets located in Shimizu, Japan.

Following the close of the transaction, the Johnson Controls portfolio will be substantially simplified with enhanced strategic focus, aligned with the company's objective to be a pure-play provider of comprehensive solutions for commercial buildings, JCI said.

Johnson Controls' R&LC HVAC business in fiscal 2023 generated approximately 4.5 billion dollars in consolidated revenue.

The transaction is expected to close in approximately 12 months, subject to required regulatory approvals and other customary closing conditions.

JCI also said that it expects 2024 third fiscal quarter adjusted earnings per share to be slightly ahead of its previously issued guidance range. The company will report third fiscal quarter earnings on July 31, 2024.

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(RADIOCOR) 23-07-24 10:39:50 (0237) 5 NNNN