Emerson Electric Co. is selling a majority stake in its climate-technologies business to Blackstone Inc. in a transformational deal for the industrial company that would value the unit at $14 billion including debt and mark the biggest private-equity buyout in months at a time when such activity has been choked off by market volatility.
The deal, expected to be announced Monday, would give Blackstone
a 55% stake in the unit, which sells compressors and other HVAC products and services used in commercial and residential heating and cooling as well as cold storage, executives from both companies said. Emerson
would retain a 45% stake.
Blackstone and its co-investors would contribute $4.4 billion in equity toward the deal, which would be supplemented by $5.5 billion of debt financing. Equity that Emerson is rolling over along with a $2.25 billion seller note would account for the remainder of the price tag.
In a typical market, banks would provide the debt financing, carving it up and selling it off to a number of buyers. Banks currently aren’t offering such so-called syndicated financing, however, as they grapple with a glut of debt from big buyouts struck before the stock market tumbled earlier this year.