American Industrial Partners, a private equity firm, has purchased majority the high pressure solutions segment of Ingersoll Rand Inc., a global provider of flow creation and industrial services. Ingersoll Rand will receive cash proceeds of approximately $300 million at closing for its majority interest and retain a 45% common equity interest in the business.
“High Pressure Solutions has an outstanding reputation, a history of innovation, a focus on serving its customers and a talented workforce,” said Alex Menkhaus, partner at AIP. “We are excited to partner with the HPS team to continue to provide our customers with leading technology, quality and service.”
“Today’s transaction is a meaningful step forward in our transformation and achieves many of the goals we have previously communicated,” said Vicente Reynal, chief executive officer of Ingersoll Rand. “It significantly reduces our direct exposure to the upstream oil and gas market to non-material revenue exposure of <2%, and accelerates our ESG commitments. We are pleased to achieve an attractive valuation for our shareholders with the opportunity to continue to benefit from future economic upside, and secure significant upfront cash that we will use to support growth. After a successful year during 2020 despite the pandemic, we now enter the next phase of our journey with a portfolio focused on core, higher-growth, sustainability-oriented industrial markets, including water, life sciences, and renewable energy, supported by strong secular trends.”
Jones Day is serving as financial advisor to American Industrial. Simmons Energy, a division of Piper Sandler & Co., is serving as exclusive financial advisor to Ingersoll Rand, Citi is serving as special advisor and Kirkland & Ellis LLP is serving as legal counsel.