01—Abstract
Summary
Summary of the 8-K filed June 10, 2024. Cited figures are marked; the original filing is the authoritative source.
On June 10, 2024, Ingersoll Rand Inc. permanently divested its legacy asbestos liability by selling its wholly-owned subsidiaries that hold these liabilities and the related insurance assets to Delticus, a corporate liability acquisition platform owned by entities affiliated with Third Point LLC.
Delticus assumes management of the divested subsidiaries, including management of their claims and insurance policy reimbursements. At closing, the divested entities were capitalized with a total of $188.5 milliona, comprising $143.5 million from insurance settlement proceeds, $35 million from affiliates of Delticus, and $10 million from Ingersoll Rand. The company and its board received a solvency opinion from an independent advisory firm supporting the determination that the divested entities were solvent and adequately capitalized before, at the time of, and after the sale.
As a result, no asbestos liabilities or related insurance assets will be included in Ingersoll Rand's consolidated year-end 2024 balance sheet. Management stated the sale provides greater long-term financial certainty for investors and allows the company to keep focusing on organic and inorganic investments to advance its capabilities and expand its addressable markets.
Evercore acted as exclusive financial advisor to Ingersoll Rand, and Simpson Thacher & Bartlett LLP as legal counsel. The information is furnished under Item 7.01 (Regulation FD Disclosure) and is not deemed filed under Section 18 of the Exchange Act.
02—Key points
Key Highlights
- Ingersoll Rand Inc. permanently divested all of its legacy asbestos liability on June 10, 2024, by selling the wholly-owned subsidiaries holding these liabilities and related insurance assets.
- The buyer is Delticus, a corporate liability acquisition platform owned by entities affiliated with Third Point LLC.
- The divested entities were capitalized with $188.5 million at closing: $143.5 million from insurance settlement proceeds, $35 million from Delticus affiliates, and $10 million from Ingersoll Rand.
- An independent advisory firm's solvency opinion supported the determination that the divested entities were solvent and adequately capitalized before, at the time of, and after the sale.
- No asbestos liabilities or related insurance assets will be included in the consolidated year-end 2024 balance sheet.
- Delticus assumes management of the divested subsidiaries, including claims management and insurance policy reimbursements.
- Evercore served as exclusive financial advisor to Ingersoll Rand, with Simpson Thacher & Bartlett LLP as legal counsel.
03—Questions
Frequently Asked Questions
What did Ingersoll Rand sell?
The company sold its wholly-owned subsidiaries that hold its legacy asbestos liabilities and the related insurance assets to Delticus.
How much capital was put into the divested entities?
The divested entities were capitalized with a total of $188.5 million at closing, including $143.5 million from insurance settlement proceeds, $35 million from affiliates of Delticus, and $10 million from Ingersoll Rand.
How will this affect Ingersoll Rand's financial statements?
No asbestos liabilities or related insurance assets will be included in the company's consolidated year-end 2024 balance sheet.
Who is responsible for managing the asbestos claims going forward?
Delticus assumes management of the divested subsidiaries, including the management of their claims and insurance policy reimbursements.
Why did the company pursue this transaction?
Management said the sale provides greater long-term financial certainty for investors and lets the company continue focusing on organic and inorganic investments to advance its capabilities and expand its addressable markets.
04—Continue