PALM BEACH GARDENS, Fla. - Carrier Global Corporation (NYSE: NYSE:CARR), a provider of climate and energy solutions, has completed the divestiture of its Industrial Fire business to Sentinel Capital Partners for an enterprise value of $1.425 billion, the company announced today. This transaction marks a significant step in Carrier's ongoing portfolio transformation.
The sale, which was finalized today, Tuesday, is part of Carrier's strategy to streamline its operations and focus on its core businesses. Carrier Chairman & CEO David Gitlin expressed gratitude to the Industrial Fire employees for their dedication and contributions to the company.
Carrier plans to allocate the net proceeds of approximately $1.1 billion from this sale toward reducing its debt. The company aims to achieve a net leverage ratio of around 2 times by the end of 2024. Additionally, Carrier has indicated that it anticipates resuming share repurchases this year.
The process of selling Carrier's Commercial and Residential Fire businesses is also underway and progressing as planned. The company expects to close the sale of its Commercial Refrigeration segment by the end of the third quarter.
Goldman Sachs (NYSE:GS) & Co. LLC and J.P. Morgan Securities LLC have been serving as Carrier's financial advisors, with Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP as external legal counsel.
Carrier Global Corporation is known for its innovative solutions in the climate and energy sectors. The company has a history of pioneering new technologies and industries and is committed to creating sustainable solutions for the future.
This news is based on a press release statement.
In other recent news, Carrier Global Corporation has been making noteworthy strides. Citi recently upgraded the company's stock from Neutral to Buy, setting a new price target of $74.00. This upgrade is based on Citi's confidence in Carrier's ability to navigate known challenges and complete its transformation into a pure-play HVAC entity by 2025.
Moreover, Carrier has successfully sold its security business, Global Access Solutions, to Honeywell (NASDAQ:HON) for $4.95 billion. This move is a crucial part of Carrier's ongoing strategy to focus on its core businesses and reduce its debt.
In terms of financial performance, Carrier reported a robust first quarter in 2024. The company saw a 17% increase in sales to $6.2 billion and a 44% rise in adjusted operating profit to $927 million. Additionally, Carrier's earnings per share grew by 19%, demonstrating its continued momentum.
InvestingPro Insights
As Carrier Global Corporation (NYSE: CARR) navigates through its strategic portfolio transformation with the recent divestiture of its Industrial Fire business, there are several key financial metrics and analyst insights that are worth noting. Carrier's commitment to reducing its debt and improving shareholder value is mirrored in its financial health and market performance.
One of the InvestingPro Tips highlights that Carrier has consistently raised its dividend for 4 consecutive years, which may appeal to income-focused investors. Additionally, analysts predict that Carrier will be profitable this year, reinforcing the positive outlook on the company's operational efficiency and market positioning.
From the real-time data provided by InvestingPro, Carrier's market capitalization stands at a robust $55.77 billion USD, reflecting its significant presence in the Building Products industry. While the company is trading at a high earnings multiple with a P/E ratio of 42.62, this could indicate investors' confidence in its future earnings potential. Moreover, the revenue growth over the last twelve months as of Q1 2024 is a healthy 9.35%, showcasing Carrier's ability to expand its top-line amidst its strategic shifts.
Investors looking to delve deeper into Carrier's financials and market prospects can find additional insights and tips on InvestingPro. There are 10 more InvestingPro Tips available, which could provide a more comprehensive analysis of the company's performance and outlook. For those interested in accessing these insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Carrier's strategic divestitures and focus on core businesses are expected to streamline operations and improve financial flexibility, positioning the company for sustainable growth. With a clear path towards reducing its leverage ratio and the potential resumption of share repurchases, Carrier is taking tangible steps to enhance shareholder value in the coming years.
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