8-KMaterial AgreementsExhibits & Filings

Trane Technologies plc 8-K Report, Material Agreement (May 6, 2019)

Filed May 6, 2019For Securities:TT

Summary

This 8-K filing by Trane Technologies plc (formerly Ingersoll Rand) details a significant Reverse Morris Trust (RMT) transaction with Gardner Denver Holdings, Inc. The core of the transaction involves the separation of Ingersoll Rand's Industrial segment, which will be combined with Gardner Denver. Following the separation, Ingersoll Rand shareholders will receive approximately 50.1% of the combined entity's stock, while Gardner Denver shareholders will retain approximately 49.9%. This strategic move aims to create a more focused industrial company and is expected to be tax-free for Ingersoll Rand shareholders, with certain exceptions for cash paid in lieu of fractional shares. The filing outlines the definitive agreements, including the Merger Agreement and Separation Agreement, and numerous ancillary agreements governing the transition of services, taxes, employees, real estate, and intellectual property. A key condition for closing is the payment of $1.9 billion by the Industrial segment to Ingersoll Rand, facilitated by debt financing from several financial institutions. The transaction is subject to customary closing conditions, including regulatory approvals and shareholder votes. The combined entity is expected to operate under the name 'Ingersoll Rand, Inc.' with a new board structure and leadership appointments.

Key Highlights

  • 1Ingersoll Rand plc is undertaking a Reverse Morris Trust (RMT) transaction with Gardner Denver Holdings, Inc.
  • 2The Industrial segment of Ingersoll Rand will be separated and merged with Gardner Denver.
  • 3Post-transaction, Ingersoll Rand shareholders are expected to own approximately 50.1% of the combined entity, with Gardner Denver shareholders owning approximately 49.9%.
  • 4The transaction is structured to be tax-free for Ingersoll Rand shareholders, with potential exceptions for cash payments for fractional shares.
  • 5A $1.9 billion payment from the Industrial segment to Ingersoll Rand is a condition for the separation, supported by debt financing.
  • 6The combined company is expected to be renamed 'Ingersoll Rand, Inc.' and will have a new board and leadership structure.
  • 7Various ancillary agreements are in place to manage the transition of services, taxes, employees, real estate, and intellectual property.

Frequently Asked Questions

This 8-K filing announces the definitive agreements for a Reverse Morris Trust (RMT) transaction between Ingersoll Rand plc (now Trane Technologies plc) and Gardner Denver Holdings, Inc. It details the structure and key terms of the separation of Ingersoll Rand's Industrial segment and its combination with Gardner Denver.

A Reverse Morris Trust transaction is a complex tax-efficient corporate reorganization. In this case, Ingersoll Rand is separating its Industrial business, distributing shares of this new entity (SpinCo) to its shareholders, and then merging that entity with Gardner Denver. This structure allows for the combination of businesses while generally preserving the tax-free status of the distribution for shareholders.

Upon completion of the merger, Ingersoll Rand shareholders will collectively own approximately 50.1% of the combined entity's fully diluted shares, while existing Gardner Denver shareholders will own approximately 49.9%.

The transaction is designed to be tax-free to Ingersoll Rand shareholders for U.S. federal income tax purposes, except for any cash received in lieu of fractional shares. The filing also notes a $1.9 billion payment to be made by the Industrial segment to Ingersoll Rand, facilitated by debt financing secured by Gardner Denver and the Industrial segment, which is a condition for the separation.