Trane Technologies Plc · NYSE:TT
Trane Technologies — Ingersoll-Rand — Merger or Acquisition (April 2019)
31 slides from Trane Technologies's merger presentation, Apr 30, 2019
Slide 1: Ingersoll Rand and Gardner Denver Announce a Compelling Transaction
Ingersoll Rand and Gardner Denver Announce a Compelling Transaction April 30, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed transaction between Gardner Denver Holdings, Inc. (“Gardner Denver”) and Ingersoll-Rand plc (“Ing
Slide 3: Non-GAAP Financials
Non-GAAP Financials Included in this presentation are certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Margin, and Organic Revenue, designed to supplement, and not substitute for, the financial information presented in accordance with
Slide 4: Today’s Presenters
Today’s Presenters Michael Lamach Vicente Reynal Chairman and CEO CEO Susan Carter Neil Snyder SVP and CFO CFO 4
Slide 5: Transaction Overview
Transaction Overview Michael Lamach | Chairman and CEO, Ingersoll Rand
Slide 6: Unlocking Significant Shareholder Value: Formation of Two Industry-Leading Global Companies
Unlocking Significant Shareholder Value: Formation of Two Industry-Leading Global Companies Overview of Today’s Announcement IndustrialCo3 ▪ Definitive agreement to combine Ingersoll Rand Industrial segment and Gardner Denver, creating ~$6.6B ▪ Global leader in mission-critical flow creation and ind
Slide 7: Transaction Summary
Transaction Summary ▪ Ingersoll Rand Industrial segment to combine with Gardner Denver in a tax efficient transaction valued at approximately $15B – ClimateCo receives $1.9B of cash proceeds and existing Ingersoll Rand shareholders receive approximately 210M1 newly issued IndustrialCo shares valued
Slide 8: Transaction Benefits for Gardner Denver and Our Shareholders
Transaction Benefits for Gardner Denver and Our Shareholders Vicente Reynal | CEO, Gardner Denver
Slide 9: IndustrialCo: Diversified Global Leader in Mission-Critical Flow Creation and Industrial Products
IndustrialCo: Diversified Global Leader in Mission-Critical Flow Creation and Industrial Products 1 Provides Greater Scale and Reach through Leading Brands and Market Position ~$6.6B 2 Enhances End Market Balance and Diversity Pro Forma Revenue1 3 Broadens Portfolio of Technologies and Solutions 4 S
Slide 10: Gardner Denver is a ~$2.7B Premier Industrials Flow Creation Company
Gardner Denver is a ~$2.7B Premier Industrials Flow Creation Company Key Financial Metrics (FY2019E)¹ Business Highlights Industrial (~48%) Revenue ~$2.7B Broad range of air compression, vacuum, blower and fluid products, including associated aftermarket parts, consumables and services, across a wid
Slide 11: Ingersoll Rand Industrial is a Highly Strategic and Additive Asset-Rich Portfolio
Ingersoll Rand Industrial is a Highly Strategic and Additive Asset-Rich Portfolio Key Financial Metrics (FY 2019E)1,2 Business Highlights Compression Technologies & Services (~57%) Revenue ~$3.8B Complete range of centrifugal, reciprocating and rotary air compressor products, systems and services fo
Slide 12: Transaction Benefits: Greater Scale, Balance and Diversity
Transaction Benefits: Greater Scale, Balance and Diversity 1 Greater Scale with Iconic Brands 2 Enhanced End Market Balance and Diversity Geographic Mix by Revenue2 • ~$6.6B1 premier industrial with expansive IndustrialCo global footprint to best serve our customers • Highly complementary strategic
Slide 13: Broadens Portfolio of Technologies and Solutions
3 Transaction Benefits: Broadens Portfolio of Technologies and Solutions Flow Creation Technologies¹ FY2018 Revenue By Technology Expanded offering from specialized air Compression to ultra-high pressure Complementary technologies Blower & enhancing the depth of combined Vacuum offering Significant
Slide 14: Strong Recurring Revenue and Aftermarket Platform
4 Transaction Benefits: Strong Recurring Revenue and Aftermarket Platform FY2018 Aftermarket Revenue ~ $2.5B 2 • Creates a ~$2.5B recurring service and 3 aftermarket platform 1 2 ~ $1.5B • 40% of IndustrialCo revenue 40% ~ $1.1B • Solidifies resiliency of the business 40% 39% • Expands already large
Slide 15: World-Class Operating Platform Fueled by a Talented Global Workforce
5 Transaction Benefits: World-Class Operating Platform Fueled by a Talented Global Workforce Drive innovation and 1 productivity 2 Proven & unique system to accelerate profit growth 3 Committed to sustainability and energy efficiency Focus on employee 4 engagement Servicing Customer Needs with Highl
Slide 16: Transaction Benefits for Gardner Denver and Our Shareholders
Transaction Benefits for Gardner Denver and Our Shareholders Neil Snyder | CFO, Gardner Denver
Slide 17: IndustrialCo Financial Profile
IndustrialCo Financial Profile Ingersoll Rand Industrial Segment1 IndustrialCo2 2019E Revenue ~$2.7B ~$3.8B ~$6.6B ~$1.6B3 (With Synergies) 2019E Adj. EBITDA ~$0.7B ~$0.7B ~$1.4B (Without Synergies) ~25%3 (With Synergies) 2019E Adj. EBITDA Margin ~25% ~18% ~21% (Without Synergies) Capital Intensity
Slide 18: Transaction Benefits: Compelling Value Creation
Transaction Benefits: 6 Compelling Value Creation Manufacturing Run-Rate Synergy Estimate ▪ Global manufacturing and service footprint optimization ~$250M1 ▪ Continued deployment of operational efficiency initiatives through world-class operating platform Manufacturing Supply Chain / Procurement ▪ G
Slide 19: Efficient Capital Structure Provides Flexibility Going Forward
Efficient Capital Structure Provides Flexibility Going Forward IndustrialCo Net Debt / Adj. EBITDA1 ~2.3x ▪ Significant cash flow generation ~1.9x ▪ Pro-forma net leverage allows for continued balance sheet flexibility ▪ Reinvest for future growth-focused innovation ▪ Maintain low-capital intensity
Slide 20: IndustrialCo: Straightforward Strategy For Increasing Shareholder Value
IndustrialCo: Straightforward Strategy For Increasing Shareholder Value Straightforward Strategy Creating Shareholder Value... • Provides Greater Scale and Reach through Deploy Talent Leading Brands and Market Position • Enhances End Market Balance and Diversity • Broadens Portfolio of Technologies
Slide 21: Transaction Benefits for Ingersoll Rand and Our Shareholders
Transaction Benefits for Ingersoll Rand and Our Shareholders Michael Lamach | Chairman and CEO, Ingersoll Rand
Slide 22: Transaction Benefits for Current Ingersoll Rand Shareholders
Transaction Benefits for Current Ingersoll Rand Shareholders Terms of the Transaction Creates Pure-Play Global Leader in Climate Company ▪ Reverse Morris Trust structures transaction to be tax-free Stronger Combined Industrial Company to both companies’ shareholders ▪ At close, 50.1% of IndustrialCo
Slide 23: Global Sustainability Megatrends Play to Strengths of Pure Play ClimateCo
Global Sustainability Megatrends Play to Strengths of Pure Play ClimateCo URBANIZATION 60% of the population, or 5 billion people will be living in cities1* Our solutions for buildings, homes and transportation reduce greenhouse gas (GHG) emissions and energy intensity of the world through: RESOURCE
Slide 24: ClimateCo Becomes Pure-Play Global Leader in Climate Control Solutions
ClimateCo Becomes Pure-Play Global Leader in Climate Control Solutions for Buildings, Homes, and Transportation Pro Forma Segment Mix1 Revenue Streams1 HVAC FY2019E Commercial ~$12.9B Transport Refrigeration HVAC Equipment 32% 68% Revenues Parts and Services Equipment ● World leader in HVAC Resident
Slide 25: ClimateCo Pro Forma Financials
ClimateCo Pro Forma Financials Susan Carter | SVP and CFO, Ingersoll Rand
Slide 26: ClimateCo Pro Forma Financials (Based On January 2019 Guidance)
ClimateCo Pro Forma Financials (Based On January 2019 Guidance) ClimateCo FY2019E Pro Forma Metrics1 Climate Revenue ~$12.9B Climate Adj. EBITDA ~$2.0B Climate Adj. EBITDA Margin ~15.7% Tax Rate Less than 21% to 22% Working Capital Target 3% to 4% Capex 1% to 2% of Revenue Free Cash Flow >= 100% Adj
Slide 27: ClimateCo Pro Forma Financials (Based On January 2019 Adj. EPS Guidance)
ClimateCo Pro Forma Financials (Based On January 2019 Adj. EPS Guidance) $6.15 to $6.35 Illustrative full-year impact ~$0.35 $4.85 to $5.05 $4.40 to $4.60 ~$0.30 ~($1.75) ~($0.20) $0.6 to $1.0B debt pay down Stranded costs eliminated by 2021 $0.9 to $1.3B share repurchase and M&A3 FY19 Guidance Indu
Slide 28: ClimateCo Will Continue to Execute a Consistent Strategy with Singular Climate Focus
ClimateCo Will Continue to Execute a Consistent Strategy that Delivers Profitable Growth with Singular Climate Focus 1. 2. 3. 4. Sustained Operational Dynamic Capital Winning Growth Excellence Allocation Culture Nexus of sustainability Margin improvement Reinvestment, dividends, Commitment to and en
Slide 29: Unlocking Significant Shareholder Value Through the Formation of Two Industry-Leading Global Companies
Unlocking Significant Shareholder Value Through the Formation of Two Industry-Leading Global Companies IndustrialCo ClimateCo ▪ Creates a premier Industrial company with ~$6.6B1 ▪ Pure-play, global leader in climate control solutions Global Industry of revenue, ~$1.6B1,2 of Adj. EBITDA and pro forma
Slide 30: Appendix
Appendix
Slide 31: Important Additional Info and No Offer or Solicitation
Important Additional Info and No Offer or Solicitation IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed transaction, Gardner Denver and Ingersoll Rand Industrial will file registration statements with the SEC registering shares of Gardner Denver common stock and