NVent Electric is selling its thermal management business, one of the company’s three segments, for $1.7 billion.
nVent Electric makes $1.7B deal to sell smallest division
The London-based company run from St. Louis Park is selling its thermal management unit to Brookfield Asset Management.
The Minnesota Star Tribune
August 1, 2024 at 8:54PM
In May, it was rumored that nVent was seeking offers for the business, which includes radiant floor heating systems, de-icing and snow melting systems, and pipe protection products. On Thursday, the London-based company run out of St. Louis Park announced the sale to Brookfield Asset Management, a global alternative investment firm with more than $925 billion in assets.
“Consistent with our strategy, the sale represents a significant step to nVent becoming a higher growth and more focused electrical connection and protection leader, well-positioned with the megatrends of electrification, sustainability and digitalization,” said Beth Wozniak, nVent’s chief executive, in a news release.
Thermal management, which includes the Raychem and Tracer brands, is the smallest of nVent’s three segments. In the quarter that ended March 31, the unit’s revenue was $142 million — less than half the size of the company’s electrical and fastening solutions business and a third the size of its enclosures segment.
“The move makes strategic sense to us and the ‘why now’ also makes sense given the impressive margin improvement management has achieved” for the division, Deane Dray, an analyst with RBC Capital Markets, wrote in a May 9 investor note after the sale rumors surfaced. “Divesting Thermal would enable nVent to focus on its more core enclosures/electrical/data center/liquid cooling businesses.”
The sale is expected to close by early 2025, the company stated.
NVent said it plans to use proceeds of the sale for future acquisitions and share repurchases. NVent has made two large acquisitions in the last 16 months. It completed a $695 million acquisition of Madison, Wis.-based Trachte last month and completed the purchase of New Berlin, Wis.-based ECM Industries in May 2023 for $1.1 billion. Those acquisitions were folded into the company’s enclosures and electrical connection segments.
Shares of nVent closed Thursday at $69.44, down about 4%.
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