Johnson Controls Exploring Strategic Alternatives for its Power Solutions Business

March 12, 2018 by Paul Shepard

Johnson Controls International plc (NYSE: JCI) today announced that it is exploring strategic alternatives for its Power Solutions business. Johnson Controls' portfolio includes two leading platforms within their respective industries – an integrated buildings technology and solutions business and a power solutions business that is the clear global leader in providing battery solutions to the automotive sector with an advantaged position in the aftermarket.

Both of these platforms are well positioned but are also navigating markedly different industry landscapes with unique strategic, financial and operational opportunities and requirements.

"Creating shareholder value is our top priority.  Our focus is on improving operational execution, realizing merger synergy and productivity benefits, and optimizing the business portfolio.  Given the differing dynamics of the platforms, we are evaluating strategic alternatives for Power Solutions," said George Oliver, chairman and chief executive officer.

"Over the years our team has built Power Solutions into an incredible business with a high-margin aftermarket model that has delivered consistent growth through business cycles.  These strong fundamentals, as well as recently issued provisions of U.S. Tax Reform, will be taken into account as we review the alternatives and assess which option creates the best long-term results for the business and the most value for shareholders.

"Today's announcement also reflects our strategic priority to strengthen and invest in our global market-leading positions in HVAC, fire and security solutions and integrated Building Management Systems, which operate in attractive vertical markets with strong growth prospects," Oliver added.

Johnson Controls Power Solutions is a world leader working in partnership with its customers to meet increasing electrification requirements in vehicles.  Our 15,000 Power Solutions employees create, manufacture, and distribute the most advanced battery technologies for virtually every type of vehicle. These technologies deliver uniquely sustainable, next-generation performance.

In fiscal 2017, Power Solutions generated $7.3 billion in revenue and $1.6 billion in earnings before interest, taxes, depreciation and amortization ("EBITDA").

Johnson Controls expects to complete its assessment of strategic alternatives over the next several months. There can be no assurances as to the form and timing of any transaction as a result of this strategic review, or if a transaction will be consummated, and any final decision remains subject to approval by the Johnson Controls Board of Directors.  Johnson Controls does not intend to make any further public statements until a specific determination has been made.

To assist the Company in its review, Johnson Controls has retained Centerview Partners as financial advisors.