Home » Watsco, Carrier Corp. Joint Venture Moves Forward
Watsco, Carrier Corp. Joint Venture Moves Forward
June 7, 2009
HVAC distributor Watsco Inc. and manufacturer Carrier Corp., a unit of United Technologies Corp., are moving forward with their plans to form a joint venture that will distribute Carrier, Bryant and Payne products throughout the U.S. Sunbelt, Latin America and the Caribbean.
The U.S. Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 related to the joint venture.
Watsco and Carrier's joint venture will be named Carrier Enterprises LLC. The venture will operate 110 locations in 20 states and Puerto Rico, the Caribbean and Latin America and serve more than 19,000 air conditioning and heating contractors.
Carrier will contribute 95 locations in the U.S. Sunbelt and Puerto Rico and the export division in Miami, FL. Watsco has agreed to purchase a 60% interest in the joint venture for a payable in a combination of cash and Watsco stock and contribution of 15 locations that currently distribute Carrier, Bryant and Payne products, with options to purchase additional ownership of the joint venture in future years.
Carrier Enterprises will operate as a separate and distinct entity.
The operations will sell Carrier, Bryant and Payne-branded residential and light-commercial equipment (80% of sales) and complementary parts and supplies. On a combined pro-forma basis, Watsco and the joint venture had $3 billion of revenues in 2008.
The addition of Carrier Enterprises allows Watsco a sales presence in the light-commercial HVAC market. This transaction also marks Watsco's entrance into international markets through the addition of the Latin American and Caribbean sales operations of Carrier Enterprises.
Albert Nahmad, Watsco's CEO, said: "We are excited to partner with Carrier in this outstanding business. We consider this joint venture to be transformational. It accelerates our strategy to develop a national network of high performing HVAC/R businesses to serve contractor customers with quality services and products. We are also fortunate that our historically conservative mindset toward our balance sheet and overall financial position has allowed us to take advantage of this substantial opportunity. As important, the transaction structure provides us with the capacity and flexibility to continue our buy-and-build strategy in the years ahead."
Watsco is a distributor of air conditioning, heating and refrigeration equipment and related parts and supplies in the HVAC/R industry, operating 412 locations serving 40,000 customers in 34 states.