Brookfield Business Partners, CDPQ To Acquire Power Solutions Business From Johnson Controls 

Brookfield Business Partners, CDPQ To Acquire Power Solutions Business From Johnson Controls 

Brookfield and CDPQ will acquire 100 percent of Johnson Controls’ Power Solutions business for approximately $13.2 billion.

Brookfield Business Partners L.P., together with institutional partners and Caisse de dépôt et placement du Québec (CDPQ), have reached an agreement whereby Brookfield and CDPQ will acquire 100 percent of Johnson Controls’ Power Solutions business for approximately $13.2 billion.

The business produces batteries for global automakers and aftermarket distributors and retailers for use in nearly all types of vehicles, including hybrid and electrical models.

“We are excited to grow our business with the acquisition of Power Solutions, a global market leader which generates consistent cash flows and profitability,” said Cyrus Madon, CEO, Brookfield Business Partners. “We look forward to partnering with the management team to continue growing this world-class business and build on its track record of innovation.”

“We are very pleased to partner with Brookfield, that shares our vision of value creation through long-term commitment,” added Stéphane Etroy, executive vice president and head of private equity at CDPQ. “This transaction enables us to acquire not only the world leader in automotive batteries, but also a model in terms of environmental and health and safety measures, that runs one of the most efficient industrial recycling systems globally.”

The business is a market leader in automotive batteries, with significant global reach and market share in both original equipment manufacturers and aftermarket channels. It is well-positioned to benefit from growth in demand for advanced batteries in all vehicle powertrains, including electric vehicles.

JCI’s Power Solutions business generates stable cash flows driven by non-cyclical aftermarket sales which comprise approximately 75 percent of its profit. Its position as a low-cost producer in its core markets has enabled consistent growth through business cycles.

Power Solutions also holds long-term relationships with top-tier original equipment manufacturers and auto retailers globally, which are served by its more than 15,000 employees in more than 150 countries.

The transaction will be funded with approximately $3 billion of equity and approximately $10.2 billion of long-term debt financing.

Brookfield Business Partners expects to fund approximately 30 percent of the equity on closing from existing liquidity. CDPQ will commit to fund approximately 30 percent of the equity on closing, and the balance will be funded by other institutional partners. Prior to or following closing, a portion of Brookfield Business Partners’ commitment may be syndicated to other institutional investors.

Financing will be led by a syndicate of banks including Barclays, Credit Suisse, JPMorgan Chase, BofA Merrill Lynch, BMO Capital Markets, CIBC Capital Markets, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, RBC Capital Markets, The Bank of Nova Scotia and TD Securities, who are each (other than Barclays) also acting as financial advisers to Brookfield.

Davis Polk & Wardwell LLP is acting as lead deal counsel to Brookfield. In addition, Baker McKenzie is providing non-U.S. legal advice, Cahill Gordon & Reindel LLP is providing compliance advice and Weil, Gotshal & Manges LLP is providing consortium advice to Brookfield. Kirkland & Ellis is acting as legal counsel to CDPQ.

Closing of the transaction remains subject to customary closing conditions including regulatory approvals. Closing is expected to occur by June 30, 2019.

You May Also Like

Rotary’s New XA12 Alignment Scissor Lift

Shops can offer alignment services with bay space to spare, and techs can perform alignments on a wider range of vehicles.

Rotary, part of Vehicle Service Group (VSG) and Dover, today announced the addition of the new XA12 Alignment Scissor Lift to its extensive line of automotive lifts for independent shop owners, dealership service departments and car enthusiasts.

The XA12 serves as the ideal small bay alignment lift solution with the largest 4-wheel alignment wheelbase range available in its class. With a 78- to 164-inch 4-wheel alignment wheelbase range and 12,000-pound lifting capacity, the XA12 is designed with space and flexibility in mind. Shops can offer alignment services with bay space to spare, and technicians can perform alignments on a wider range of vehicles.

GRI Receives US DOT Certification For Safety

GRI tires will now incorporate the DOT code emboss on its side walls.

Mevotech Adds 2,300+ New Original Grade Part Numbers

Highlights from the new Original Grade release include control arms and ball joints.

TCCI Manufacturing Unveils High-Voltage Electric Compressor

The 850V compressor, unveiled at MACS 2023, is available in 34cc/46cc/60cc/120cc.

BBB Industries Releases 28 Remy New Part Numbers 

The new part numbers cover more than 9.3 million vehicles.

Other Posts

LIQUI MOLY Generates €800M in Sales in 2022

The company says in 2022 it was able to compensate for global challenges through its strategy and quick action. 

FleetPride Acquires TML Truck & Trailer Repair

Founded in 2012, TML Truck & Trailer Repair is a full-service shop operating on heavy-duty trucks and equipment. Its central footprint deepens FleetPride’s coverage in the region.

Dayco Launches Electrically Controlled Water Pump Line

The new technology addresses a higher-than-normal failure rate with the OE pumps.

Engine Pro Honors S.A. Gear with Performance Award

S.A. Gear was recognized with a Fulfillment and Accuracy Award during Engine Pro’s annual supplier meeting.