Pentair Explores Sale of Valves-and-Controls Business -- Sources
June 02 2016 - 2:40PM
Dow Jones News
By Dana Mattioli and David Benoit
Pentair PLC is exploring a sale of its slumping
valves-and-controls business, a move that would largely unwind a
merger deal it struck just four years ago.
Pentair is working with investment bank Citigroup Inc. on a
potential sale of the business, which could fetch more than $2
billion, people familiar with the matter said.
It is unclear how advanced the sales process is and who might be
interested. And as always, it is possible there will be no
deal.
Pentair, which is based in Manchester, U.K., acquired the
valves-and-controls business as part of a $4.5 billion deal with
Tyco International Ltd. in 2012. The deal enabled Pentair to move
its headquarters abroad, where taxes are lower. While the deal
added other businesses, what Pentair is now considering selling
represented a large part of it.
But the valve business' results are weakening, with its sales
down 10% year-over-year in the first quarter and its income falling
54%, in part because of declining energy demand. Executives have
predicted an 8% drop in full-year revenue for the unit.
The business, one of four subdivisions of Pentair, makes valves,
fittings and controls for machinery used by oil-and-gas, power and
pharmaceutical companies. It has been hit by a slowdown in spending
by energy-industry customers as a result of the sharp drop in oil
prices.
Write to Dana Mattioli at dana.mattioli@wsj.com and David Benoit
at david.benoit@wsj.com
(END) Dow Jones Newswires
June 02, 2016 14:25 ET (18:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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