Dive Brief:
- Johnson Controls has signed a definitive agreement with Belgium-based Aliaxis SA to sell the manufacturing assets of its commercial PVC pipe and fittings business for light commercial and residential sprinkler systems.
- The manufacturing assets, located in Huntsville, Alabama, would expand Aliaxis’ presence in the southern U.S., the company said in a news release Tuesday release. The pipe and fittings business generates approximately $100 million in annual revenue and employs over 100 people today, Aliaxis said.
- The sale aligns with an ongoing transformation at Johnson Controls. The company has been working to pivot from manufacturing to a focus on engineered solutions, including commercial HVAC, fire, controls, security and services, CEO George Oliver said during the company’s 2024 third fiscal quarter earnings call.
Dive Insight:
As part of its portfolio simplification efforts, Johnson Controls has already reached a definitive agreement to sell its residential and light commercial HVAC business to Bosch Group, the company announced in July. The deal, valued at $8.1 billion, includes a roughly $6.7 billion consideration for Johnson Controls’ North America Ducted business and a 60% stake of its global residential joint venture with Hitachi, Johnson Controls said.
Johnson Controls also agreed to offload its commercial and multifamily-focused Air Distribution Technologies business in June. That transaction includes air distribution and movement brands Koch Filter, Titus, Ruskin, Krueger, PennBarry and Tuttle & Bailey.
“Taken together, these two transactions represent significant milestones in our portfolio transformation,” Oliver said on the July 31 earnings call.
Johnson Controls said in its third-quarter earnings presentation that following portfolio simplification, it expects its engineered solutions to account for roughly 90% of its $22 billion in pro forma fiscal year 2023 revenue — compared with its present contribution of 75% of its $27 billion fiscal year 2023 revenue. At the time of its third quarter earnings, 25% of Johnson Controls’ portfolio came from non-core businesses, including 6% from light commercial HVAC, 10% from residential HVAC and 9% from indirect fire and security.
Aliaxis, which manufactures plastic pipes for construction, industry and utilities, says the acquisition affirms its commitment to a North American growth strategy and bolsters its product range with a more comprehensive portfolio in fire suppression for residential and light commercial applications. Last year, Aliaxis acquired U.S.-based Valencia Pipe Company’s manufacturing division, adding two manufacturing facilities in Walla Walla, Washington and Kingman, Arizona, as well as a distribution center in Kingman, Arizona.
The acquisition of Johnson Controls’ assets will be part of Aliaxis’ IPEX brand, according to the news release Tuesday. Per the release, the deal is slated to wrap in the coming weeks.
