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Pentair to spin off its electrical business

Staff Writer | May 10, 2017
Manufacturer Pentair said it would spin off its electrical business into a separate publicly traded company to focus on its core business of making water treatment equipment.
Pentair   To focus on its core business
Pentair shares were up 3.3 percent on Tuesday afternoon at $68.26, a nearly two-year high.

The company, whose board of directors includes representation by activist hedge fund Trian Fund Management LP, has shed noncore businesses to improve performance.

"We have two businesses that have critical masses and are top-of-class in terms of profitability," Randall Hogan, Pentair's chairman and chief executive officer, said in an interview.

"We looked at whether they would be viable independently, how their shares would trade, and this is the best way to drive shareholder value and give employees as much opportunity as possible."

The UK-based company last month sold its valves and controls business for $3.15 billion in cash to U.S. factory automation equipment maker Emerson Electric Co.

Pentair's electrical business, which makes stainless steel, aluminum and nonmetallic enclosures that guard sensitive electrical and electronic equipment, reported sales of $2.1 billion in 2016.

This business, to be separated in a tax-free spinoff to Pentair shareholders, will be named at a later date, Pentair said on Tuesday.

Pentair will be left with its water business, which reported sales of $2.8 billion in 2016.