Volvo Group last week concluded its acquisition of U.S.-based Ingersoll Rand’s road development equipment division, other than operations in India, which will follow shortly. The division will be consolidated in the Volvo Group from May 1. The transaction was initially announced in February.
Ingersoll Rand’s operations in road development equipment comprise soil and asphalt compactors, asphalt pavers and milling machines as well as material handling equipment such as telescopic handlers and rough-terrain forklifts. As previously reported, the purchase consideration for the assets amounts to about US $1.3 billion, about SEK 8.8 billion.
Ingersoll Rand’s road development division — with production facilities in the U.S., Germany, India and China — is headquartered in Shippensburg, Pa., and has about 2,000 employees. Operations posted sales in 2006 of US $864 million, with operating profit of US $101 million.
“The sale of the Road Development business reflects our strategy to transition away from capital-intense, heavy-machinery businesses and improves the company’s efforts to achieve aggressive financial objectives consistently over the long term,” said Herbert Henkel, chairman, president and CEO. “Overall, the sale will generate net cash proceeds of approximately $1.05 billion for Ingersoll Rand.
“We will use the proceeds of this sale, in conjunction with our strong cash flow, to supplement our organic growth with acquisitions that extend our product lines, expand our geographic markets, and enhance our recurring revenue streams, as well as to increase our share repurchase activity.”
Headquartered in Göteborg, Sweden, the Volvo Group is one of the world’s leading manufacturers of trucks, buses and construction equipment, drive systems for marine and industrial applications, aerospace components and services.
Ingersoll Rand, Hamilton, Bermuda, is a leading diversified industrial company providing products, services and integrated solutions to industries ranging from transportation and manufacturing to food retailing, construction, and agriculture.