Pentair to Spin Off Electrical Amid Acquisition of Valves & Controls by Emerson

Pentair plc, London, UK, plans to separate its business into two independent, publicly-traded companies. The company’s water industry businesses will continue under the Pentair name and a spin-off electrical manufacturer will operate under a name yet to be announced. The announcement came following Emerson’s acquisition of Pentair’s Valves & Controls business for $3.1 billion in an acquisition completed last month.

The transaction to split Pentair will create one company focused on water and fluid processing applications. This business designs, manufactures and delivers innovative solutions to residential, commercial and industrial customers who place a premium on high quality water and fluids. Strategic business groups include Filtration & Process, Flow Technologies and Aquatic & Environmental Systems. The company will retain the Pentair name and ticker symbol. This business segment generated approximately $2.8 billion in sales in 2016.

The other parts of what’s now Pentair will form an electrical manufacturer focused on industrial enclosures, fastening systems and thermal management technologies that help protect sensitive equipment, buildings and critical processes and help keep people safe. Strategic business groups include Enclosures, Thermal Management and Electrical & Fastening Solutions. The company will be named at a later date. Electrical generated approximately $2.1 billion in sales in 2016.

Pentair has built its stable of electrical brands by acquiring some of the most recognized names in the industry over the course of many years. Brands include Caddy, Erico, Eriflex, Hoffman, Lenton, Raychem, Schroff and Tracer. The Pentair site highlights these brands as providing “a comprehensive range of standard, modified and custom engineered solutions for energy, industrial, infrastructure, commercial, communications, medical, security and defense applications.”

The separation is expected to occur through a tax-free spin-off of Electrical by Pentair to its shareholders. “We have built two strong, high-performing businesses with the operating acumen and culture to thrive as two independent companies," said Randall Hogan, Pentair chairman and CEO. "Separating Water and Electrical to create two pure-play companies is the next logical step in the evolution of Pentair and is consistent with our strategy to continually enhance shareholder value. Both companies will have the focus, talent and flexibility to grow profitably, both organically and through acquisitions."

Beth A. Wozniak, the current president of Pentair's Electrical segment, will become CEO of Electrical. Randall J. Hogan will retire as Pentair's chairman and CEO and will serve as chairman of Electrical.

The Valves & Controls business acquired by Emerson is headquartered in Schaffhausen, Switzerland, and provides valve solutions and services with nearly 7,500 employees around the world. The business will be integrated into Emerson’s Automation Solutions platform.

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