Pentair to separate into two independent, publicly-traded companies

10 May 2017

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British diverse industrial products maker Pentair Plc yesterday said that it would separate into two independent, publicly-traded companies, one focused on water and the other electrical.

The proposed transaction will create a global water company with the Pentair name and ticker symbol. Pentair generated around $2.8 billion in sales in 2016.

The water company designs, manufactures and delivers innovative solutions to residential, commercial and industrial customers.

Its businesses include filtration & process, flow technologies and aquatic & environmental systems.

The other company, yet to be named, will be a high-performance electrical company, which will focus on industrial enclosures, fastening systems and thermal management technologies that help protect sensitive equipment, buildings and critical processes.

Its business groups include enclosures, thermal management and electrical & fastening solutions. The electrical unit generated around $2.1 billion in sales in 2016.

Pentair expects one-time separation costs of about $100 million-$125 million related to the spin-off, which is estimated to close in the second quarter of 2018.

"We have built two strong, high-performing businesses with the operating acumen and culture to thrive as two independent companies," said Randall Hogan, Pentair chairman and CEO.

"Separating Water and Electrical to create two pure-play companies is the next logical step in the evolution of Pentair and is consistent with our strategy to continually enhance shareholder value. Both companies will have the focus, talent and flexibility to grow profitably, both organically and through acquisitions," he added.

Upon separation, John Stauch, senior vice president and chief financial officer of Pentair, will become Pentair's CEO and Karl Frykman, the current president of Pentair's water segment, will become the COO.

David Jones will become chairman of the water-related company, while Beth Wozniak, the current president of Pentair's electrical segment, will become CEO of the Electrical company. Randall Hogan will retire as Pentair's chairman and CEO and will serve as chairman of the electrical company.

London-based Pentair has recently come under pressure from its second-biggest shareholder activist hedge fund Trian Fund Management, which said that the company can grow by "facilitating prudent industry consolidation through accretive mergers and acquisitions.''

Last month it sold its Switzerland-based valves and controls business to Emerson Electric Co for $3.15 billion in cash. (See: Emerson Electric to buy valves and controls business of Pentair Plc for $3.15 bn)

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