ABB looks to shed over $1bn in non-core assets
New York, February 7, 2014
Swiss industrial conglomerate ABB is seeking to divest several units whose sale could raise more than $1 billion in total proceeds, according to people familiar with the matter, joining a list of large companies looking to shed non-core businesses.
ABB is seeking buyers for businesses out of Thomas & Betts Corp, the U.S. electrical components maker it acquired two years ago for $3.9 billion, as well as assets out of Power-One Inc, the U.S. solar energy company it bought for about $1 billion last year, the people said.
The assets up for sale include the steel structures business out of Thomas & Betts, as well as its heating and air conditioning unit operating under the Reznor brand, the people said, asking not to be named because the matter is not public.
ABB is also selling the power solutions unit out of Power-One and a separate industrial services business, the people said.
These four businesses combined have roughly $150 million in annual earnings before interest, tax, depreciation and amortization and could be sold for a high single-digit multiple of that amount, people familiar with the matter said.
ABB is working with several banks including Bank of America Merrill Lynch, Credit Suisse Group and Raymond James to help find buyers for the various units, the people said.
Private equity firms, which are keen to buy non-core assets being carved out of companies, are interested in the assets, they added.
Representatives for ABB, Bank of America, Credit Suisse and Raymond James did not immediately respond to requests for comment.
In January 2012, ABB struck a deal to buy Thomas & Betts, which supplies the construction, communications and power industries with connectors for cables, steel masts and heating and ventilation products.
The engineering conglomerate also bought Power-One Inc the following year, betting that growth in emerging markets will revive a sector hurt by overcapacity and weakening demand in recession-hit Europe.
A number of industrial companies have been actively selling off assets to streamline their business lines and focus on their core strength.
On Thursday, industrial conglomerate Illinois Tool Works announced a $3.2 billion deal to sell its packaging business to private equity firm the Carlyle Group.-Reuters