Ingersoll Rand Spins Off Security - Allegion

By Brian Rhodes, Published Dec 10, 2012, 12:00am EST (Info+)

Multinational conglomerate Ingersoll Rand [link no longer available] stunningly announced plans to spin off its multi billion dollar security business [link no longer available], including its flagship security brand Schlage. In this note, we examine the details of the plan, the motivation behind it, compare to Schneider, UTC and Honeywell plus discuss what happens next.

Spinoff *******

********** ***** ******** **** ***** **** oligarch *** ***************** *****, ********* ****'* ***** ***** ** break *** *** *******'* "********" ******** unit. ***** "********" *********** *** *******'* smallest *****-***** ******** ****, ** ***** large ** *** **** ******** *** physical ******** *******. *** ****** ************ under **'* ******** **** *******:

*** ******** ******** ***** ** $*.*-$*.** ** annual ******** [**** ** ****** *********]. The ******* *** ****** ** ******* the ****-*** ** ** ********* ** about * ****.

*** ******* ***** **** *** ******** relations **** [**** ** ****** *********] overviews *** *****/*******:

ir split

****'* **** ** ******** *** ******** division/spin *** ** **** ****:

ir security spin off

***** ******** ****** ********** ***** ** not ******** - *** *******, ******* recently **** *** ********* ******* ******** ** ********** **********- *** ********* **** *** ** an ****** ******* ****** ******** ** uncommon ** *** ******** ******.

Debt ******

** ***** ** **** ** *** spun *** ******** ******** **** *********** debt, ********* * ****/****** ***** ** ~2.75x ** *.***. ***** *** ****** risky *** *** ********, ** ** an ********* **** ********** **** **** and ******** *** ***** ** ******* the ****, *** ********** *** ********* in *** ******** ******.

********

******** ******** **** * ****-****-******** ******** to *** *****. **** **** ******* from ******* **** ****** ************ ** *** **** (**** ******** is ****):

"Analysts *** *** ******** **** *********** ********* *** *******, noting the company's stock price adequately reflects the value of the company's parts. They estimate the price of new security company's stock at about $10 a share, with the remaining parts of Ingersoll worth about $40 a share.

"*********-**** ** *** ********* ** ** as * ********* [*** *******]," **** Deane ****, * *****-******** ******* *** Citi ********** ********. "** * ***-**-***-***** basis,there's ** ***** **** **** ** ** ********."

"** **** *** **** ** * big ***** [**********], *********** *** ******** ...***** ****** *****," ***** **** *******, ** ******* for ******** ******** ********, ***** ******* its ****** ** ********* ** **** from **** ** ****** **** * $46 ****** *****."

***** *** ***** ******'* **** ** the ************* ** ********, *** **** ** expected ** ***** ********** ** **'* other ******** *****. ***** ********* ********* manufacture ********* *** ************ *********. *******, the ************ *** *** ********* ** strongly ** *** ****** ** ****** quarters, ***** **** ********* ** *** broadness ** *** ******.

What's ****?

*** ********* ****** *** ** ******** is **** ** *** *** ***** on *** *** ***** *** ***** within ********, ****** **** ***** **** of * *******, **** ************ ************. This ***** **** **** **** ****** decisions *** ** **** ********** ***** security ******** ******* *********** *** *********.

***** *** ******* ********* **** ******** will ** **** *** ** * whole, ** ******* *** ******** **** the ******** ******* ***** ***** ********** be **** *** ** *** *** security ******* ** **** *** * small ******* *** *** **** ******* related ** *** ************** ***** ******** focus ** ************.

Other *************

**** **** ******* ******** ****** ** massive ************* **** ********** ******** ******* industrial ***** ********* ********. *** ********, Honeywell, ***, *** ********* *** **** similar *******. **** ***********, ** ****** the ********* ** *** '*********' *** value ** ******* **** ******* ********* together. **** * ******* *********** ***** conglomerates **** ********* ****** ******* ***** more ******* *** ******* ***********. ******* this ** * **** ** **** will **** *** ***** *************, ** at ***** **** ****** ****.

**********, *** ***** *** *********** ***** about *************, **** ** * **** in *** ******** *********.

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