If there's one luxury during the summer that every American
home should have, it's the air conditioner. And that's what American Standard
Cos. is betting on. The Piscataway, N.J.-based company is restructuring,
focusing solely on its growing air conditioning business. American Standard
completed the final step of its transformation by selling its bath and kitchen
business on Monday for $1.76 billion to private equity firm Bain Capital LLC.
The restructuring move seems like a wise one given that American Standard
generated $6.8 billion, or 60%, of its total 2006 sales in its air
conditioning business. In the second-quarter 2007, American Standard's air
conditioning unit's revenues climbed 9.6% to $2.04 billion from $1.86 billion,
and income from the sector grew 3.8% to $288.8 million from $278.1 million.
With the proceeds of the sale of its bath and kitchen unit, American Standard
will buy back shares and reduce debt to keep the company on an
investment-grade level. American Standard already sold its plumbing fixture
division on Feb. 1 and plans to spin off its auto brake business into a
publicly traded company called Wabco on July 31. With its new focus, American
Standard will rename itself Trane after its signature brand.
—Gerald Magpily
See
Boston Business Journal
See
Reuters
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