Ingersoll may sell, spin off some units: 14% of Davie workers would be affected.
Published in: Winston-Salem Journal (Winston-Salem, NC)
Date: 5/16/2007
By: Richard Craver
A decision by Ingersoll-Rand Co. Ltd. to explore selling or spinning off its construction-related businesses could affect about 14 percent of its work force in Davie County.
The company, incorporated in Hamilton, Bermuda, said yesterday that its Bobcat, utility-equipment and attachments units are targeted for a potential sale or a spinoff. It expects to decide in the second half of the year.
“Our Bobcat, Utility Equipment and Attachments businesses represent world-class operations with exceptional people, products and brands,” Herbert Henkel, the chairman, president and chief executive of Ingersoll-Rand, said in a statement.
“However, these businesses no longer fit Ingersoll-Rand’s long-term strategy,” he said.
The company completed the sale of its road-development business to AB Volvo for $1.3 billion in April.
Henkel said that the company’s goal is to be “a true diversified industrial company with powerful growth platforms consisting of climate control, industrial and security businesses.”
About 100 of its 700 Davie employees work in utility equipment, according to employees who contacted the Winston-Salem Journal. The other 600 employees are connected mainly to the company’s climate-control division, which includes portable air compressors, stationary air compressors, generators and light towers.
Paul Dickard, a spokesman for the company, said that though he could not confirm the local work-force mix, the figures appeared to be accurate.
“We are exploring our options right now,” Dickard said. “We have made no secret of wanting to divest or move away from a capital-intensive machinery profile.
“We want to emphasize that this is by no means a distressed sale.”
The divisions being considered for sale or spinoff accounted for $2.6 billion in revenue in 2006 — about 23 percent of overall revenue.
Terry Bralley, the Davie County manager, said he is concerned about the potential ripple effect on the company’s local operations.
“This is potentially big news for us considering Ingersoll-Rand has been the crown corporate jewel for this county for many years,” Bralley said.
“Not only do they make product here with some of the county’s best skilled labor, but they also do research and development.”
The company said that its board of directors has approved expanding the amount it plans to spend on repurchasing shares from $2 billion to $4
billion. About $330 million in shares have been repurchased under the authorization.
“Our strong operating cash flow, the proceeds we generate from a sale or spin-off of businesses, and our strong balance sheet allow us to continue to pursue growth through strategic acquisitions,” Henkel said.